Core view
The 2022 government work report proposed to establish a financial stability guarantee fund, use market-oriented and legalized methods to resolve potential risks, and firmly hold the bottom line of no systemic risks. On March 25, the State Council issued opinions on the implementation of the division of key work in the government work report, requiring that the work related to the raising of financial stability guarantee fund be completed by the end of September and continued to be promoted during the year. We believe that at present, China's financial risk prevention and control has changed from a tough battle to normalization. In the future, the situation outside China is still complex and changeable, and the vulnerability of China's financial system still exists. The establishment of a financial stability guarantee fund will raise financial risk prevention to the whole financial system, form an effective complementarity with deposit insurance and industry guarantee funds, and help to keep the bottom line of no systemic financial risk.
Internationally, the establishment of financial stability guarantee fund is a common practice for countries to deal with financial risks. Some developed economies have established financial stability guarantee funds, such as the United States, the European Union and Germany. This paper introduces the typical overseas practices in turn: American orderly clearing fund (OLF), EU single disposal Fund (SRF), EU financial stability fund (EFSF), EU European stability mechanism (ESM) By comparing the similarities and differences and combining the current policy deployment, the German financial market stabilization fund (FMS) makes the following judgment on the operation mechanism of China's financial stability guarantee fund:
1. Led by the people's Bank of China, multi department coordination and division of responsibilities.
2. The rescue objects are mainly systemically important financial institutions + financial holding companies, including both banking financial institutions and non banking institutions, but will not directly participate in the rescue of financial markets and non-financial institutions. The financial stability guarantee fund and the existing deposit insurance fund, insurance guarantee fund and other industrial funds coexist and complement each other, rather than replace each other. The two sides form effective complementarities and jointly constitute China's overall financial security framework. The financial stability guarantee fund will be mainly used for the rescue and disposal of systemically important financial institutions and financial holding companies, and the deposit insurance fund and industry guarantee fund will be mainly used for the rescue and disposal of non systemically important financial institutions. It is possible to establish a "borrowing" channel from the deposit insurance fund to the financial stability guarantee fund. Once the former has a shortage of funds in the disposal risk, it can borrow from the financial stability guarantee fund to make up the gap.
3. The financial stability guarantee foundation arranges a certain scale of initial funds, that is, it provides a certain amount of precipitated funds in advance. Once it participates in the capital supply required for risk disposal, it makes institutional contributions on this basis. For the source of initial funds, we judge that there may be four channels: contribution through central bank refinancing, contribution by issuing special treasury bonds, issuance of debt financing instruments with financial stability guarantee fund as an independent subject, subscription of funds by systemically important financial institutions and financial holding companies. The debt financing instruments take government credit as implicit endorsement, and the expected interest rate is slightly higher than that of treasury bonds of the same period, However, the yield is slightly lower than that of policy financial bonds. The daily operation of the financial stability guarantee fund will mainly rely on institutional investment, "take it from the market and use it in the market". The investment institutions are still systemically important financial institutions and financial holding companies, and implement differentiated charges according to different industries and different subjects.
Risk tip: the implementation of the policy is less than expected. Economic fundamentals and capital market fluctuations have increased, and the demands of financial stability guarantee fund funds have been broadened and improved.
