Update: Chinese CBRC pledged to strictly regulate the transfer behavior of bank loans

The China Banking Regulatory CommissionSaid, we must resolutely stop the improper cooperation between banks and non bank financial institutions, strictly regulate the credit asset transfer behavior. The move is part of a series of measures introduced to control financial risk.

The CBRC warned repeatedly,Commercial banks and Trust Investment CompanyAmong the non bank financial institutions of cooperation risks,The latter will usually bank loans packaged into againConduct financial transactionsProducts, and sold to customers, which increased the difficulty of regulators to curb loan growth.

The CBRC may increase the regulation and control of bank lending, in order to guarantee the loan growth will not lead to asset bubbles and inflation.

Unnamed people familiar with the matter said last Thursday, CBRC issued new guidance, called for the strengthening of theBank loan transfer regulation. Chinese banks will in generalThe end of the quarter for loan transferIn order to whitewash, balance sheet, and achieve the regulatory authorities in the capital and risk control requirements.

The people familiar with the matter said, in a date for internal notice in December 3rd,The CBRC urged loan transfer of the two sides signed a new contract clearly debtor creditor relationship, and the transfer must include all of the loan principal and interest income. He also said, the split loan transfer will be prohibited.

He said, the regulations also require loan transfer contract shall not contain the clause. In addition, the insider said, the loan into the side must be recognised on the balance sheet of the credit assets, and loans to Licensor must be transferred out of the balance sheet.

Liu Mingkang reiterated, commercial banks should take more credit funds into the real economy, especially agriculture related enterprises and small and medium enterprises.

He also urged banks to strengthen credit risk management of local government financing platform.

Update: China CBRC to tighten credit transfer

Abbreviation.The China Banking Regulatory Commission) issued new guidance, called for the strengthening of the bank credit asset transfer regulation, this is afterwards after last year's credit boom, and move the CBRC has taken to lower the risk of the financial system.

For the rapid economic growth and curb the cooling in the two-year highs inflation, Chinese government is trying to curb credit growth, and tighten up the loan transfer rules is one of the measures. According to the banking industry sources, these Provisions have been started to influence the loan transfer transaction.

But these Provisions may also develop on the newly launched the national inter bank market restricts the loan transfer transaction platform. China Central Bank launched in 9 by the end of the national inter bank market loan transfer platform, to help banks to replenish the capital, reduce risk, and promote the reform of interest rate. In addition, increased Chinese loan transfer transaction transparency is one of the objectives of the platform launched. Earlier, similar transactions are lack of form of OTC transparency.

The people familiar with the matter said, in a date for internal notice in December 3rd, CBRC loan transfer of the two sides signed a new contract clearly debtor creditor relationship, and the transfer must include all of the loan principal and interest income. He also said, the split loan transfer will be prohibited.

He said, the regulations also require loan transfer contract shall not contain the clause.

In addition, the sources said, the loan into the side must be recognised on the balance sheet of the credit assets, and loans to Licensor must be transferred out of the balance sheet.

Sino German securities (Zhong De Securities) analyst She Minhua think, the CBRC is another government measures to slow credit growth.

Chinese banks generally seek the loan transfer at the end of the quarter, to whitewash the balance sheet, and achieve the regulatory authorities in the capital and risk control requirements.

The CBRC in recent months has asked the national commercial banks, especially large state-owned banks to replenish the capital base, and potentially bad assets to put aside more reserves.

FitchInternational rating (Fitch Ratings) estimated in a report last week, Chinese banking industry this yearRMBThe size of new loans has exceeded regulators set annual 7.5 trillion yuan ($$1.126The dollar) limit, in addition to more than 3 yuan trillion yuan of new loans off their balance sheets.

Fitch Ratings said, Chinese bank loans compared with 2009 basically unchanged. In order to ensure the China economy remain strong during the global financial crisis, Chinese banks in 2009, according to the government's economic stimulus plan large-scale issuance of the credit, the size of new loans reached about two times a year before.

A reluctance to disclose the names of the Beijing bankers said, China Banking Regulatory Commission to strengthen the loan transfer regulation to be just unfolding Chinese loan transfer market participants added obstacles.

This personage says, affected by the new regulations, the turnover of loan transfer market has begun to shrink sharply.

Besides the impact on banks, the CBRC promulgated new rules on loan transfer business is one of the government measures Chinese from ultra loose monetary policy.

According to the 15 economists surveyed expected value, Chinese November consumer price index (CPI) will be compared to the same period last year rose 4.7%, increase compared with October's 4.4% expansion.

China government have shown intention to curb inflation. The Political Bureau of the CPC Central Committee last week said, monetary policy next year Chinese will from "moderately loose" to "prudent".

Interbank lending transactions start or on regulatory challenges

In September 25th, the market trading system of the national interbank loan transfer officially started, ChineseIndustrial and Commercial Bank of ChinaAndBank of CommunicationsShanxi, Shanghai Pudong Development Bank and Jincheng City Commercial Bank, Bank of communications and Panzhihua City Commercial Bank reached the first loan transfer transactions through the system. On the same day, the ICBC, the bank and other 21 banks and financial institutions have also signed the "loan transfer master trading agreements".

The governor of the central bankZhouSaid at the signing ceremony, the loan transfer is a new variety of transactions according to the inter - bank market demand and the development of its launch, the inter-bank market products, commercial bank loans to change the business model, has the important meaning to improve the risk management ability and promote the marketization of interest rate.

"Signing the loan transfer transaction Master Agreement" and the national inter bank market loan transfer transaction start, to standardize the development of China's loan transfer market, improve the transmission mechanism of monetary policy, strengthen the financial macroeconomic regulation and control, to optimize the credit structure, prevent and resolve potential financial risks, has important practical significance, not only enrich and develop banking financial institutions to meet the product requirements and means of capital constraints, active management of assets, also accord with the changes and requirements of the current international financial reform situation.

Chinese bankMarket traders president, chairman of Industrial Commercial Bank of China LtdJiang JianqingEvaluation, "are clearly agreed key problem loan transfer transaction Master Agreement" on the loan transfer transactions, to protect the interests of both lending transactions, plays an important role in development of China's loan transfer market norms.

It is understood, the trading system in the national inter bank market loan transfer market will be members of the loans transferred the quotation, confirmation and disclosure of information service. 2008 loan transactions amounted to 800000000000 yuan over the same period, new yuan loans amounted to 4.91 yuan. In 2009 China's lending surge to 9.59 trillion yuan also contributed to the rapid growth of loan transfer business.

Shanghai University of Finance and economics of Modern Financial Research Center Deputy Director Xi Junyang in an "International Finance News" reporter the interview said: "trading system of loan transfer between banks start for banks to increase service varieties selection, between the bank profit and cost accounting, to grasp the risks to the complementary."

Xi Junyang analysis, first of all, the loan bank to bank transfer transaction system to solve the liquidity management problem for banks. If some banks more tension in a certain period of funds, are lending out, and some banks (especially the city firm) relatively well-off to capital, capital constrained banks will loan transfer to the capital more lenient banking, it meets the needs of the management of bank liquidity.

Secondly, can adjust the inter bank lending risks, reduce systemic risk. Different banks have different advantages, loan business has its own characteristics, such as some bank industry to a lack of understanding of the loan risk, while other banks is relatively perfect, can make loans transferred out, reduce the risk of.

Finally, loan transfer will improve the ability of transfer pricing of bank loans, the banks to accept a loan transfer pricing conditions must be attractive, and to accept the loan transfer bank can expand business, increase profitability.

China banking research center director of the Central University of Finance and EconomicsGuo TianyongPointed out: "the loan transfer, can satisfy the need for banks to adjust the credit scale, the credit structure, loan balance."

However, experts on the system also raised concerns about the future, Xi said: "trading system to transfer the mortgage banking will bring challenges to our country credit supervision, through the development of loan transfer transactions, the bank may over development of the credit, the excessive use of credit, the credit amount exceed the standard, regulators should promote the bank credit development at the same time don't let the macro credit index out of control."

Loan transfer (related links)

According to a new variety of transactions interbank market demand to develop, it has enriched the inter-bank market products, commercial bank loans to change the business model, has important significance in improving the risk management ability and promote the marketization of interest rate.

According to the trading rules, banks must provide the mechanism to hold the loan principal balance ratio, lenders, borrowers, loan information name information in the submit loan for transfer (including the original loan contract number, currency, loan types, loan five grades classification, the use of the loans, loan amount, interest rate floating mode), information security, and notes etc. information.

The CBRC rules loan transfer did not dare to "hide and seek"

The transfer of supervision on illegal loans strict control graduallyA encirclement. Following last month "shot" specificationBank letter of cooperation credit type financial productsAfter that, the China Banking Regulatory Commission recently heavy again.

The China Banking Regulatory Commission in December 24th last year, issued the "norms onThe transfer of credit assets and credit asset management businessNotice related matters "(which explicitly pointed out, from banks to avoid the credit scale control or regulation of capital adequacy ratio requirements, deliberately to transfer their credit assets. The "double buyout" credit asset transfer in the process of the "missing" loans, as well as the phenomenon of illegal transferring assets into the capital markets, regulators will be severely punished.

In fact, from the beginning of the second half of 2009, after half of the ultra conventional lending, coupled with the supervision department supervision on capital of commercial banks, especially small and medium-sized banks loan transfer appears increasing trend.

According to the general manager of a big bank Fujian branch of the bank to solve the capital shortage, temporary, the traditional method is to issue financial products through the trust company, or syndicated loan way will be transferred to other banks.

Among them, there are two kinds of silver, a buyout type, such as the banks have a part of the loan will be a one-time transfer to the postal savings bank; the other is the buyback, is that the two sides signed the buyback contract, the transferor to other banks in the capital is nervous, a few years after the easy money and redemption to. The former belongs to the normal transfer, and the latter due to not credit assets and related risk really moved to the table, are regulators identified as illegal behavior.

On the basis of repo style, in recent years and the development of "double buyout" form. A joint-stock banks responsible person pointed out, the so-called "double buyout" refers to the two sides signed two contracts, one is the current "buyout" contract, another is long-term "repo" contract. "Just look at any one contract no problem, but in fact, the transferred loans are not reflected in the assets of two banks, which give regulators monitor the flow of credit, credit is difficult to control." He said.

The "notice" provisions, prohibit the untrue transfer of assets, the credit asset transfer, the transferor itself must not arrange any explicit or implicit conditions of repurchase. And to prohibit the transfer of assets by both sides signed repurchase agreements (i.e. repo style transfer), a spot purchase plus forward repurchase agreements (i.e. double outright transfer) mode to avoid regulation.

"Notice" stressed that the authenticity of the loan transfer, the transferor shall request the credit risk, market risk and liquidity risk completely transferred to the transferee, will be the credit assets off their balance sheets, the transferee shall at the same time, the credit assets as their assets to manage; both the transferor and the transferee shall be to achieve coherence, related risk at any point in time may be lost, the transferee shall be calculated according to the corresponding risk weight assets, provision of necessary risk provision.

The first venture research institute analyst Chen Xi thinks, afore-mentioned regulations, blocked between commercial banks to avoid channel of capital adequacy supervision through the repurchase of credit assets, the overall impact of negative. At the same time, because the relevant scale data is not available, it is difficult to estimate the specific impact.

The joint-stock bank responsible people are relatively optimistic. He said, "double buyout" in the bank balance sheet adjustment in the proportion is very small, and the branch office to use more, less. Therefore, the "notice" to the 2010 bank balance sheets have little effect. "Regulators on silver letter financial cooperation were the norm, and stop the illegal transfer of the credit, not standardized platform and channel block, to carry out large-scale operations in a standardized platform, combined dredge."

Loan transfer incremental "contract of yin and Yang" hidden risks

In the face of capital adequacy, credit scale control pressure between financial institutions, credit asset transfer began showing an increasing trend. It also raises the regulators pay close attention to the existence of the "Yin contract" and other irregularities in the transfer of the loan.

The central bank recently released data show, September new loans of financial institutions 516700000000 yuan, more than the market generally expected before. Among them, four line new loans is only 110500000000 yuan, the lowest since 2009. In September, new loans 13 nationwide joint-stock banks is as low as 15425000000 yuan. These figures mean that city commercial banks, rural credit cooperatives, financial companies and other financial institutions to become the main body of credit in September.

But United Securities analyst Zhang Jing pointed out that, to increase the lending as credit transfer or active delivery, is still unable to determine.

Shun securities analyst recently found in the visited Suzhou two joint-stock bank, some banks due to capital constraints or considered to be the future capital adequacy ratio, has the active adjustment of the business structure or outward replacement loan, takeStructural adjustment loans (compressed bills),Packing loan, sell sell financial products and solution to the financial and capital bottleneck problem.

"This year the situation is special, the fast pace of the first half lending, some banks greater pressure on the capital adequacy ratio supervision indicators and so on, need to transfer the credit. While some banks have not in the first half of the credit 'charge' get much project, also has power over him by improving the profit level of credit." A local authorities said at the end of the season, so the bank to transfer the loan to assets adjustment will be increased.

"Between the bank or banks and finance companies credit transfer, it is normal to adjust the capital structure, but with the increase in loan transfer case, violations may also increase." The local regulatory personage points out, if the outright transfer are found to exist in the "contract of yin and Yang" problem, the regulators will be punished to the relevant institutions in accordance with the illegal behavior.

The so-called "contract of yin and Yang", refers to the transferor and the transferee to sign outright transfer contract, in order to reduce the size of credit and capital consumption, through regulatory assessment objective, at the same time, both in private and sign a buyback contract. The above-mentioned sources:"So the two agencies did not reflect the true situation in carrying on the transfer of assets, while hiding risks."

The eastern region a regulatory departments responsible person also pointed out that, in the transfer of credit assets supervision, the buyout contracts can no longer buy back contract is a key link. "This is for risk assets supervision and design. If the buyout approach to transfer the loan, banks get capital, risk assets and capital consumption decrease. But if there is a buy back contract on the basis of this, although the bank temporarily took money, but the risk of the assets and capital consumption is still maintain the original level."

"At present, did not find this kind of illegal from the situation, also has not become the special job, but in the regulatory process, is really paying attention." The local regulator said.

At the same time, the transfer of credit risk transfer has importance for the supervision department. The eastern region supervision department person in charge told CBN, took over the credit assets for city commercial banks, rural credit cooperatives and other small financial institutions, regulatory authorities also remind small banks, large banks on some of the"A high rise"Industrial loans to slowly recover, exit, small banks do not blindly into, so as to avoid the risk of transmission.