The Bank of America exploded one after another, and there was also a wave of runs. People worried that it would burn to Taiwan. Tong Zhengzhang, deputy director of the Banking Bureau of the Financial Supervisory Commission, pointed out on the 14th that from the perspective of the three indicators, the Bank of China has sufficient resilience. The “resilience indicator” BIS is all up to the standard, and the provision for bad debts is 9 times that of bad debts; “corporate governance is sound” The average liquidity management index is 130% higher than the standard by 100%; the “Prudential Supervision Framework” is in line with international standards, and there are control mechanisms for overseas exposure. In addition, the Bank of China made a huge profit of 391.9 billion yuan last year, which also hit a record high.
Tong Zhengzhang pointed out that the four major indicators in the “Resilience Index” of the Bank of China are all good, and the risk tolerance is high. Reached 11.17%, 12.48%, 14.70% are far higher than the statutory ratio. Looking at the allowance for bad debts, the coverage rate is as high as 910.46%, which means that the amount of the Bank of China’s provision for bad debts is more than nine times that of bad debts.
In terms of “sound corporate governance effectiveness”, Tong Zhengzhang pointed out that the Bank of China not only has an effective liquidity monitoring mechanism, but also has a concentration and early warning mechanism for the top 20 and 50 largest depositors, and will also adopt liquidity stress testing , through the bank’s internal assets and liabilities management committee to review the liquidity of deposit concentration and maintain a sound and prudent supervision framework. He further pointed out that liquidity is not only monitored by the bank, but also by the Bank of China’s monthly deposit ratio, liquidity reserve ratio, liquidity coverage ratio, and the proportion of the top 20 depositors in the total. “Liquidity management is an important The most important thing is that there are supervision indicators.”
Tong Zhengzhang said that there are two important indicators for monitoring liquidity indicators. The short-term indicator is the liquidity coverage ratio (LCR), and the long-term indicator is the net stable funding ratio (NSFR). Neither of these two indicators can be lower than 100%. Last year At the end of the day, the average of these two indicators of the Bank of China was 134.60% and 138.27%, respectively. The liquidity is sufficient and safe, and individual banks are also up to the standard.
In terms of “prudent supervision”, liquidity management will be in line with international standards, and a management and control mechanism for overseas exposures will be established, including the establishment of a system for the head office to establish a system for compliance with laws and regulations in overseas branches, and effective management and control of the collective exposure of large loan customers. The Association of Banks also has overseas credit standards, post-loan review procedures, and establishes a management and control mechanism through the Deposit Insurance Corporation to ensure that the Bank of China has solid operational resilience in the face of various international changes, economic, political, and social impacts.
Tong Zhengzhang pointed out that as of the end of January this year, the Bank of China had absorbed 52.6 trillion yuan in deposits, most of which were on the lending side, and only 17.8 trillion yuan was placed in financial assets. In addition to profitability, liquidity must also be considered in this part, so More than 50% are placed in cash, treasury bills, central bank negotiable certificates of deposit, government bonds, etc. Will the Bank of America storm limit the development of new ventures? Tong Zhengzhang believes that financial institutions are also responsible for supporting government-supported industries with strong resilience. In the future, banks will still be encouraged to support new startups and provide the necessary funds for startups to operate under controllable risks.
further reading
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