Prudent Monetary Policy Must Be Truly Sound.

In the first quarter of this year, China's economic and financial data achieved a good performance. On the basis of economic recovery, the balance of broad money (M2) increased by 13.4% at the end of the first quarter, an increase of 13.4% yuan compared with the same period last year, and RMB loans increased by 4 trillion and 610 billion yuan, a record high.

Liu Dongliang, senior analyst at China Merchants Bank's asset management department, said that the authorities especially mentioned that they should not abandon the flood irrigation, do not engage in strong stimulation, and abandon the illusion of easy money to boost growth.

If the authority can influence the level of the decision of the central bank, it can be considered that monetary policy will become stable in the future, and the number of times in the future may be further reduced, more in order to hedge the gap in the basic money supply, and the space for reducing interest rates will also shrink.

In the above article, the authority pointed out that the central government's policy was not out of shape and unchanged.

We must implement the spirit of the central economic work conference comprehensively, accurately and faithfully. Prudent monetary policy must be truly sound. Positive fiscal policy must be truly positive. The main line of structural reform on the supply side will be more prominent.

Although the authorities have been right in recent years

The term "steady" has always been used, but its connotation has changed.

With the reduction of interest rates several times since last year, monetary credit has been substantially "loose". Market analysts believe that part of the credit volume in the first quarter came from the demand recovery of real enterprises, but there are also factors affecting the explosive growth of the real estate market.

"Trees can not grow to the sky. High leverage will inevitably bring high risks. Bad control will lead to a systemic financial crisis, resulting in negative economic growth and even the savings of ordinary people. That will be fatal.

Such a comparison will help us know where the focal point of our work should be, and we must know that we cannot and do not need to use leverage to push economic growth. "

The authority pointed out.

Liu Dongliang told media reporters that the rapid rise of China's economic leverage ratio is obvious to all. The excessive dependence of economic growth on credit has brought about the constant exposure of debt problems.

The above expression of authoritative personages means that the credit rush situation in the first quarter has aroused the vigilance of the policy-making level, and may soon appear the action of stepping on the brakes on credit. At the same time, this euphemistically criticizes the practice of adding the lever to the real estate stock in the residential sector.

Authorities also talked many times about avoiding long-term economic development.

"To avoid the use of" flood irrigation "expansion method to give the economy a shot in the arm, resulting in short-term excitement after the economy is getting worse.

The authority also cited for example, "some countries have implemented long-term stimulus policies, and have accumulated a lot of bubbles. As a result, in policy choices, they either maintain monetary easing and allow prices to skyrocket or tighten up the money to break the bubble."

"High leverage" is the "original sin" and the source of financial high risk.

Liu Dongliang believes that the authority of the special mention of not flooding irrigation, not strong incentives, and to abandon the illusion of easy money to stimulate growth, the recent central bank's monetary policy stance consistent with this basically.

If the authority can influence the level of the central bank's decision-making, we can think that monetary policy will become stable in the future, that is, as long as the economy does not expect to deteriorate again, the monetary policy is more likely to fine tune on the basis of the current rather than large-scale relaxation.

The number or further reduction is more aimed at hedging the gap in the basic money supply, and the rate of interest reduction may also shrink.

The "authoritative" interview also mentioned the recent hot debate on "debt to equity swap".

He said, "we emphasize that mergers and acquisitions and bankruptcy liquidation should be more frequent. But for those enterprises that are really unable to save, the closure must be closed. The bankrupt must go bankrupt in accordance with the law. We should not engage in" debt to equity swap "at any time. We should not engage in the restructuring of" matching ". It will be too costly to deceive ourselves, sooner or later, it will be a big burden.

In the face of high corporate debt and bad assets ratio of banks, it is hoped that the securitization of bad credit assets and the debt to equity swap discussed in the near future are expected. But at the same time, there is increasing concern about the smooth implementation of the latter and the expected goal.

Under the current economic situation, commercial banks' debt to equity swap can only change the quality of their book assets in form, but it can not be improved in essence. If the profitability of convertible enterprises can not be significantly improved, the quality of commercial bank assets will even decrease.

Hu Jianzhong, vice president of Asset Management Co of China the Great Wall, pointed out in an article published in 9.

In a recent report, the International Monetary Fund (IMF) pointed out that banks usually do not have the expertise to operate or reorganize enterprises, and often need to find competent pitional management.

Debt to equity swap may lead to moral hazard and conflict of interest. After debt to equity swap, banks are linked to enterprises. Banks may continue to provide loans to enterprises, creating new liabilities and impeding the disposal of shares.

The situation of state owned enterprises may also increase.