Opinion of the Ministry of Finance and the China Banking Regulatory Commission on Tackling the Current Global Financial Crisis and Strengthening the Financial and Risk Management of Financial Institutions of the Banking Industry

财政部、中国银行业监督管理委员会关于当前应对金融危机加强银行业金融机构财务和风险管理的意见

Promulgating Institution: Ministry of Finance; China Banking Regulatory Commission

Document Number: Cai Jin [2009] No.40

Promulgating Date: 05/26/2009

Effective Date: 05/26/2009

颁布机关: 财政部; 中国银行业监督管理委员会

文   号: 财金[2009]40号

颁布时间: 05/26/2009

实施时间: 05/26/2009

To the finance departments (bureaus) all provinces, autonomous regions, municipalities directly under the Central Government and specifically designated cities in the State plan, all banking regulatory bureaus, and all financial institutions of the banking industry administered by the Central Government:

In order to tackle the global financial crisis, fulfill the macro control requirements of "boosting domestic demand to sustain economic growth, adjusting the structure of the economy to raise it to a higher level of development, moving ahead with the intent of reform and to invigorate the economy, giving top priority to ensuring people's well-being and promoting social harmony" made by the Central Government and the State Council, all relevant departments have released policies and measures with respect to finance, taxation, banking, industry, etc., and the policy system for the steady and rapid development of China's economy has been established. Financial institutions of the banking industry have actively taken measures to tackle the global financial crisis and have achieved preliminary success in terms of adjusting development strategies, increasing the supply of credit, strengthening operation and management, and improving the quality of services. In order to further enhance financial support for economic development, enhance the ability of financial institutions of the banking industry to prevent and resolve financial risks, and promote the steady, progressive and healthy development of the national economy, we hereby set forth the following opinions on the issues concerning the strengthening of financial and risk management of financial institutions of the banking industry:

  各省、自治区、直辖市、计划单列市财政厅(局),各银监局,各中央管理的银行业金融机构:

  为应对国际金融危机,落实党中央、国务院提出“扩内需保增长、调结构上水平、抓改革增活力、重民生促和谐”的宏观调控要求,各有关部门陆续出台了一系列财税、金融、产业等政策措施,形成了促进经济平稳较快发展的政策体系。银行业金融机构积极采取应对措施,调整发展战略,增加信贷投放,加强经营管理,提高服务质量,取得初步成效。为进一步加大金融支持经济发展的力度,提升银行业金融机构防范和化解风险的能力,推动国民经济平稳健康发展,现就加强银行业金融机构财务和风险管理的有关问题提出如下意见:

1. Further improving the quality of financial services and fully supporting economic development. 

Improvement in service quality is the fundamental social responsibility and obligation that a financial institution of the banking industry shall fulfill. Financial institutions of the banking industry shall adhere to the principle of scientific outlook on development to guide the overall situation, comprehensively apply the ten measures of the Party Central Committee and the State Council for further boosting domestic demand and promoting economic growth, and imbibe the spirit of the Certain Opinions of the General Office of the State Council on Promoting the Economic Growth by Adjusting the Current Financial Structure (Guo Ban Fa [2008] No. 126), practically enhance financial support for economic development, fully utilize the guiding and supporting function of credit policies, and provide more support to the implementation of requirements "sustaining economic growth, boosting domestic demand, and adjusting structure" as provided in the State's policies to fully enhance the efficiency, ability and quality of the services for the national economy and spare no effort to promote the steady and progressive economic development.

    一、进一步提高金融服务质量，全力支持经济发展。提高服务质量是银行业金融机构应当履行的基本社会责任和义务。银行业金融机构要坚持以科学发展观统领全局，深入贯彻落实党中央、国务院关于进一步扩大内需、促进经济增长的十项措施以及《国务院办公厅关于当前金融促进经济发展的若干意见》（国办发[2008]126号）精神，切实加大金融支持经济发展的力度，充分发挥信贷政策的导向功能和支持作用，更好地贯彻落实国家“保增长、扩内需、调结构”的政策要求，全面提升服务国民经济的效率、能力和质量，全力促进经济平稳较快发展。

2. Attaching great importance to financial management of corporate borrowers to ensure loan quality. 

The financial soundness of corporate borrowers is an important factor for ensuring the safety of credit funds granted by financial institutions of the banking industry. Financial institutions of the banking industry shall, according to the requirements present in the Certain Opinions of the Ministry of Finance on Tackling Financial Crisis and Strengthening Financial Management of Enterprises (Cai Qi [2009] No. 52), scrupulously examine and study the financial management undertaken by corporate borrowers, and regard all content of financial management of a corporate borrower as the conditions and criteria for pre-loan investigation, review during the loan term and post-loan examination. Financial institutions within the banking industry shall pay more attention to external guarantee and other possible liabilities of the corporate borrowers, in particular mutual guarantee and revolving guarantee between affiliated enterprises, and timely adjust credit limits and strategies for credit management, thus preventing the accumulation of credit risks. When executing merger and acquisition (M&A) loan business, financial institutions of the banking industry shall, in accordance with the relevant provisions of the Guidelines for Commercial Banks on Merger and Acquisition Loan Risk Management, diligently analyze and evaluate the risk present in the provision of M&A loans to assure banks against suffering credit fund losses on account of indiscriminate expansion by enterprises. Under the current circumstance wherein the credit business is developing at a relatively fast pace, financial institutions of banking industry are required to properly handle the relation between efficient development and prudent operation and improve their ability for assessing and identifying risks to ensure the quality of new loans.

    二、高度关注借款企业财务管理,确保贷款质量稳定。借款企业的财务稳健程度是影响银行业金融机构信贷资金安全的重要因素。银行业金融机构要按照《财政部关于当前应对金融危机加强企业财务管理的若干意见》(财企[2009]52号)要求,高度关注借款企业财务管理状况,把借款企业财务管理的各项内容作为贷前调查、贷时审查、贷后检查的条件和标准之一。要高度关注借款企业对外担保以及其他或有负债情况,尤其是关联企业之间相互担保和循环担保,及时调整授信额度和信贷管理策略,防止信贷风险积聚。在开展并购贷款业务时,要按照《商业银行并购贷款风险管理指引》相关规定,认真分析和评估并购贷款风险,避免因企业盲目扩张造成银行信贷资金损失。在目前信贷业务发展较快的特殊时期,更要统筹处理好有效发展和审慎经营的关系,增强对风险的判断和识别能力,确保新发放贷款经得起历史检验。

3. Strengthening internal risk and effectively preventing market and operational risks.

A sound internal control system is the basis for the effective prevention of risks. Financial institutions of the banking industry are required to (1) strengthen overall risk management and internal control and promote a culture wherein compliance measures are adhered to; (2) reasonably allocate assets and improve their work relating to liquidity supervision and the preemption of possible risks and issuance of a warning in advance; (3) enhance the analysis, research and assessment of the world's major currency exchange rates and monitoring the interest rate fluctuations in major financial markets, enhance the assessment and monitoring of the changes to the market value of foreign currency assets held, and timely execution of dynamic operation, thus effectively preventing the risk arising out of exchange rate vacillation; (4) actively accommodate the adjustment of domestic interest rate policies to enhance the ability to cope with changes in interest rates; (5) comprehensively improve informatization construction and its scientific and systematic planning, enhance information system's risk management function, so as to ensure the integration and security of informatization construction; and (6) further improve the construction of the operational risk management system and strive to ensure the prevention and control of all types of illegalities, and in particular prevent the occurrence of serious and major violations.

    三、强化内部风险控制,切实防范市场和操作风险。完善的内控体系是有效防范风险的基础。银行业金融机构要全面加强风险管理,加强内控和合规文化建设。要合理配置资产,做好流动性监测和风险预警。要加强对全球主要货币汇率、主要金融市场利率波动的分析研判,加强对持有的外币资产市值变化的评估与监控,及时实施动态操作,有效防范汇率风险。要积极适应国内利率政策的调整,提升利率变化应对能力。要全面加强信息化建设,科学系统规划,提升信息系统风险管理功能,确保信息化建设的协同性和安全性。要进一步完善操作风险管理系统建设,毫不松懈地抓好各类案件防控工作,有效防控各类案件特别是大案要案的发生。

4. Timely setting aside sufficient provisions and making efforts to reduce non-performing assets. 

Adequate provisions are the basis for financial institutions in the banking industry to withstand risks, carry out sound operation and promote economic development. Financial institutions within the banking industry shall, in strict accordance with the Notice of the Ministry of Finance on Printing and Distributing, the "Administrative Measures for Financial Enterprises in Setting aside Provisions for Bad Debts" (Cai Jin [2005] No. 49) and other financial regulations and relevant accounting standards and supervisory requirements, accurately classify non-performing assets and faithfully report the non-performing assets, and timely set aside sufficient reserves for all types of losses so as to increase the provision adequacy ratio and solidify their financial base. Financial institutions of the banking industry shall, according to the relevant policies of the State regarding the verification and writing-off of uncollectible accounts and the loan restructuring, reduction and exemption, make more efforts to demand repayment of non-performing loans, revitalize, verify and write-off non-performing loans, so as to timely resolve the critical issue of non-performing assets and improve the quality of other assets.

    四、及时足额提取拨备,努力化解不良资产。充足的拨备是银行业金融机构抵御风险、稳健经营和促进经济发展的基础。银行业金融机构要严格按照《财政部关于印发<金融企业呆账准备提取管理办法>的通知》(财金[2005]49号)等财务制度和有关会计准则与监管要求,准确分类和真实反映不良贷款,及时足额计提各项损失准备,提高拨备充足率水平,夯实财务基础。要根据国家有关呆账核销、贷款重组和减免的有关政策,加大不良贷款清收、盘活和核销等处置力度,及时化解不良资产,提高资产质量。

5. Prudently executing overseas mergers and acquisitions (M&As) and safeguarding from risks prevalent in overseas investment.

The global financial crisis presents challenges as well as opportunities before financial institutions within the banking industry in overseas investment and M&As. Financial institutions of the banking industry shall prudently conduct overseas investment and M&As by structuring themselves on the domestic market. Financial institutions of the banking industry shall (1) analyze and study the necessity and feasibility of investment and M&As according to their development strategies, financial status and risk tolerance level, in particular, the M&A synergy effects, reasonably select investment or M&A targets, and avoid unnecessary loss due to indiscriminate expansion; (2) pay special attention to the changes occurring in economic indicators, such as changes to exchange rates in the international markets, conduct an in-depth study on the political and legal environment, social institutions, and other relevant factors existent in the country, build M&A and management talent pool, adopt effective measures for risk isolation, and avoid risks associated with investment and M&As; and (3) strictly execute internal decision-making procedures and external examination and approval formalities for overseas investment and M&As in accordance with the State's law and regulations and enterprises' internal management system.

    五、审慎开展境外并购,防范境外投资风险。受国际金融危机影响,银行业金融机构境外投资并购面临机遇和挑战。银行业金融机构应在立足境内市场的基础上,审慎实施境外投资并购。要根据银行业金融机构发展战略、财务状况和风险承受能力,分析研究投资并购的必要性和可行性,尤其是要分析并购的协同效应,合理选择投资并购对象,避免因盲目扩张造成不必要的损失。要高度关注国际市场汇率变化等经济指标,深入研究被投资国的政治、法律环境及社会状况等因素,储备专业化并购和管理人才,采取有效风险隔离措施,规避投资并购风险。要按照国家法律法规和企业内部管理制度,严格履行境外投资并购的内部决策和外部审批程序。

6. Strengthening the management of agency operations and making efforts to reduce off-balance-sheet risks. 

Financial institutions of the banking industry shall pay great attention to the risks associated with agency operation, strengthen their management over agency operations, carefully review the relevant principals in terms of their risk management capabilities, internal control level and internal decision-making process, strengthen the management of the entire sales process, including pre-sale, sale and post-sale, so as to ensure that the risks are predictable, the cost is calculable and information disclosure is sufficient. Financial institutions of the banking industry shall, in order to address the situation concerning wealth management products issued at the height of the bull run in the capital market peak which are becoming due soon, practically protect the domestic and international reputation of the capital market and maintain the finance and social stability by making accurate predictions and preparing contingency plans in advance. Financial institutions of the banking industry are also required to enhance their publicity and training mechanisms to help investors fully understand the information on and characteristics of the relevant wealth management products, effectively identify and evaluate the potential risks and avoid unethical practices that deceive investors.

    六、加强委托代理业务管理,努力降低表外风险。银行业金融机构要高度重视委托代理业务风险,加强委托代理业务管理,认真审查被代理企业风险管理能力、内部控制水平以及内部决策程序,加强售前、售中、售后全过程管理,做到风险可测、成本可算、信息披露充分。要针对在资本市场高点发行的理财产品陆续到期的情况,早做预判、早定预案,切实维护市场声誉和形象,维护金融和社会稳定。要加强对理财产品投资者的宣传和培训,帮助投资者充分掌握有关产品的信息和特点,有效识别和评估潜在风险,避免误导投资者。

7. Focusing on cost control and avoiding rigid growth in cost. 

Financial institutions in the banking industry shall (1) take the initiative to strengthen expenditure management, reasonably control the scale of costs and expenditures, optimize the structure of costs and expenditures, and prevent rigid growth in various kinds of costs; (2) maintain a thorough understanding of the complex factors present in international and domestic economic situations, increase the awareness about potential crises situations, collectively overcome the existing difficulties, and avoid widening of the income gap between certain industries and the average social per capita income level; (3) reasonably control the remuneration of senior management personnel, resolutely prevent excessively high remuneration for senior management that does not conform to China's national conditions, economic situation, industry development and the actual situation prevalent within enterprises; (4) strengthen the control over and regularly review operational management costs, make intensive efforts towards curbing irregular and wasteful expenditure and extravagant costs arising out of ostentatious behavior; and (5) further improve the financial system, strictly enforce disciplines relating to financial affairs, strengthen the management over various costs and expenditures, improve the efficient use of investment capital, and increase revenue and reduce expenditure.

    七、着力加强成本控制,避免费用刚性增长。银行业金融机构要自觉自律地加强支出管理,合理控制费用支出规模,优化费用支出结构,避免各项费用刚性增长。要深刻认识目前国际国内经济形势的严峻性和复杂性,增强危机意识和忧患意识,共克时艰,避免进一步拉大行业收入水平与社会平均收入水平的差距。要合理控制高管人员薪酬,坚决防止脱离国情、经济形势、行业发展以及企业自身实际发放过高薪酬。要加强对经营管理费用的控制和审查,坚决遏制违规开支和讲排场、摆阔气等奢侈浪费行为。要进一步完善财务制度,严肃财务纪律,加强对各项费用开支的管理,提高资金使用效益,节支增效。

8. Strengthening financial analysis, the preemption of possible risks and issuance of a warning in advance and improving strategic decision-making ability. 

The preemptive analysis and early warning of financial risks are important measures for enterprises to control the future financial risks and serve as important bases for making business decisions. Financial institutions of the banking industry shall correctly gauge the macroeconomic trend, development and changes in the market, pay great attention to macroeconomic operations and important macroeconomic indicators, reasonably determine all financial indicators and identify goals and tasks, and scientifically predict and determine the future financial activities and financial results. Financial institutions of the banking industry are also required to strengthen the construction of information systems for economy, finance, market, policy, etc., strengthen the coherence of preemptive analysis and early warning of financial risks and enterprise development strategies, properly employ financial risk analysis and prediction methods, improve financial management level, and enhance strategic decision-making ability.

    八、加强财务分析与风险预警,提高战略决策能力。财务风险分析和预警是企业控制未来财务风险的重要方法,也是进行经营决策的重要依据。银行业金融机构要准确把握宏观经济形势和市场发展变化,高度关注宏观经济运行信息及重要指标,合理确定各项财务指标和目标任务,科学预判未来财务活动和财务成果。要加强经济、财务、市场、政策等信息体系建设,强化财务风险分析和预警与企业发展战略的相互衔接,合理运用财务风险分析和预测方法,提高财务管理水平,提升战略决策能力。

9. Deepening corporate governance reform and protecting interests of investors.

Corporate governance structure is the core of the modern enterprise system. In recent years, large-scale State-owned banks have preliminarily set up the corporate governance structure through reform to shareholding patterns, public offering and listing. However, the concept of corporate governance and the mechanism of actual practical operation need to be further improved. Financial institutions of the banking industry are required to (1) adhere to the principle of maximizing the interests of stockholders, continuously improve business management, effectively protect the rights and interests of investors, and properly handle the intertwining relationships to safeguard the interests of the State, enterprises and individuals; (2) establish clear borders, in terms of responsibilities, of the general meeting of shareholders, board of directors, board of supervisors and senior management and an effective operation mechanism of checks and balances, according to the requirements of theCompany Law,; (3) enhance the role of directors with stocks and independent directors and board of directors and directors must diligently perform their supervisory responsibility, and properly execute "loyalty obligation" and "duty of care responsibility"; and (4) effectively utilize the supervisory function of the board of supervisors and increase the rendition of support to the board of supervisors in consultation with and monitoring over the board of directors and senior management personnel.

Ministry of Finance

China Banking Regulatory Commission

May 26, 2009

    九、深化公司治理改革，维护出资人利益。公司治理结构是现代企业制度的核心内容。近年来，大型国有银行通过股份制改革和公开发行上市，初步搭建了公司治理架构，但公司治理的理念和实际运作机制需要进一步完善。要坚持以股东利益最大化为核心，不断改进经营管理，切实维护出资人权益，妥善处理好国家、企业、个人之间的利益关系。要按《公司法》要求，在股东大会、董事会、监事会、高级管理层之间建立清晰的职责边界和有效制衡的运作机制。要强化股权董事和独立董事作用，董事会及董事必须切实履行监督职责以及对企业的“忠诚义务”、“看管责任”。要有效发挥监事会的监督作用，加大监事会对董事会及高级管理层的质询和监督力度。

  财政部

  银监会

  二○○九年五月二十六日