focus on the two sessions| Lan Fo ‘an: The first batch of special treasury bonds of 500 billion yuan will be issued to support large state-owned banks to replenish core tier-1 capital

Blue Whale News, March 6 (Reporter Jin Lei and Xiao Yang Intern)On March 6, Minister of Finance Lan Fo ‘an said at a press conference on the economic theme of the Third Session of the 14th National People’s Congress that the first batch of special treasury bonds of 500 billion yuan will be issued this year to support large state-owned commercial banks to supplement core tier 1 capital.

He said that a more proactive fiscal policy reflects the pertinence and forward-looking nature of macro-control, and can be understood as continued efforts and more powerful. Among them, deficit arrangements are more powerful. This year’s deficit ratio is arranged at around 4%, and the deficit scale reaches 5.66 trillion yuan, an increase of 1.6 trillion yuan from last year. The deficit level and deficit scale are both the highest in recent years, and countercyclical adjustment efforts have been further intensified. On the one hand, we must work hard on market stock policies and implement the package of policies introduced in the fourth quarter of last year. On the other hand, we should take practical measures to plan incremental policies, make good use of policy space, focusing on benefiting people’s livelihood, promoting consumption, and increasing stamina.

He mentioned that the pressure on debt conversion has been greatly reduced, and local government debt risks have been effectively alleviated. As of March 5 this year, local governments issued a total of 2.96 trillion yuan in replacement bonds. For the 2 trillion yuan replacement bonds issued last year, the interest rate dropped by more than 2.5 percentage points on average, with the decline being even more obvious in some regions. It is expected that the interest on these replacement bonds will decrease by more than 200 billion yuan in five years, greatly reducing local financial pressure and interest expenses.

He said that in the fourth quarter of last year, my country added 6 trillion yuan at a time to replace existing hidden debt. Through overall design and mechanism reconstruction, this system not only actively resolves debt risks, but also supports local governments to free up more financial resources. Overall, we can achieve at least three major things with one policy. First, local debt pressure has been greatly reduced. As of March 5, a total of 2.96 trillion yuan of replacement bonds are expected to be issued. Last year, 2 trillion yuan of replacement bonds were issued, and interest rates fell by an average of more than 2.5 percentage points. Second, fiscal space has been released and the momentum of economic development has been significantly enhanced. Third, important steps have been taken in the reform and transformation of financing platforms. After the implementation of the replacement policy last year, the number of local financing platforms decreased by 4680, accounting for more than two-thirds of the total decrease last year.

He also said that he would insist on developing bonds while developing bonds, developing while developing bonds, and strive to achieve greater results. The first is to speed up the implementation of the detailed debt swap policy and guide local governments to issue and use it as soon as possible. This year’s 2 trillion yuan replacement bond quota accurately replaces hidden debts and supervises the entire process and chain of replacement funds to achieve early results. The second is to continue to promote the reform and transformation of financing platforms, divest the platform’s government financing functions, combine the actual situation of enterprises, promote market-oriented transformation by category, and strictly prevent state-owned enterprises and institutions from wearing new vests. The third is to resolutely curb new hidden debts, further improve the monitoring system, make curbing illegal and illegal borrowing the focus of fiscal supervision, make not to add new hidden debts the iron discipline, and resolutely prevent the destruction of old debts and the addition of new ones.

In fact, on September 24 last year, Li Yunze, director of the State Financial Supervision and Administration, said at a press conference held by the State Council Information Office that after research, the state plans to increase core tier-1 capital to six large commercial banks, which will be promoted in accordance with overall planning. The idea of one policy in stages, batches, one line, one line, one line

Data shows that the core tier 1 capital of the six major state-owned banks is above the minimum regulatory requirements. As of the end of the third quarter of last year, the core tier-1 capital adequacy ratios of Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank were 13.95%, 11.42%, 12.23%, 14.10%, 10.29%, and 9.42%, respectively. Except for the Bank of Communications, which dropped slightly from the end of the previous quarter, all other banks have increased.