What are financial resources? Financial resources
The term financial resources appears more frequently in actual departments and academic research, but there is little research on how scientific and standardized its meaning is. Maybe there is no need for pedantic norms, as long as it is generally agreed, its content mainly includes money as funds and securities that can be circulated. The acceptance of credit between members of society and between members of society and the government can also be called financial resources.
What are financial resources?
Financial resources refer to the sum or aggregation of a series of objects in the financial field related to the structure, quantity, scale, distribution, effects and interactions of financial service subjects and objects.
basic information
Basic meaning
The term financial resources appears more frequently in actual departments and academic research, but there is little research on how scientific and standardized its meaning is. Maybe there is no need for pedantic norms, as long as it is generally agreed, its content mainly includes money as funds and securities that can be circulated. The acceptance of credit between members of society and between members of society and the government can also be called financial resources. Their common feature is that they can be used as elements of economic development and can bring value-added. The government's macroeconomic control must master resources, including financial resources; the allocation of financial resources is closely related to economic macro-control. At this stage, in addition to policies and regulations, the government of our country actually controls two kinds of resources, namely monetary funds and land. Therefore, it is meaningful to analyze the allocation of financial resources in our country.
financial landscape
At present, the financial structure of our country is still controlled by the state or the government. This is not only reflected in the fact that wholly state-owned commercial banks and state-owned policy banks occupy the vast majority (more than 70%) of our country's financial marekt, but also that joint-stock commercial banks, local commercial banks, and other Financial Institution Groups are also controlled by the state or the government. Their business activities are not only regulated by the government, but also directed by the government. Some people say that the regulatory departments issue documents one after another to specifically guide the business operations of commercial banks, and they simply become the "business director" of the bank. In this situation, the business operations of the national financial system are "a game of chess". The allocation of financial resources is presented as "all matters are important, and Songdu is loose", which is basically without principles.
The reason for this situation is ultimately determined by the nature and design of our country's financial system. Our country's financial system has been changed for so many years. What has been changed? The institutional setting and name have been changed, but the nature has not changed, and the mechanism has not changed. That is to say, the nature of the state or the government's unified control of financial resources has not changed, and the set of mechanisms that operate according to the level has not changed. Under such circumstances, the person in charge of a commercial bank is both a boss and an official. He must achieve both profit goals and government goals, and even in some cases, give up his own goal of pursuing profits and first obey the overall needs. Some people say that there is no real commercial bank in our country because it does not completely pursue profit maximization as the ultimate goal. Whether this statement is realistic can be discussed. But one thing is certain, commercial banks in our country do not operate completely according to "commercialization", and it is impossible to operate completely according to commercialization. In other words, to operate completely according to "commercialization", there must be a process.
In practice, the manifestations of non-commercial operation are: loan mistakes are not handled according to market principles, but are subject to punishment by the government and superiors; the risks posed to business in the private economy are greater than those posed to business in the state-owned economy; if the loans to the state-owned economy cannot be recovered, the big things can be reduced to small things, and it is clear that things are safe and sound. If the loans to the private economy cannot be recovered, they will be suspected of bribery and held accountable. Although this practice is rare, it strongly proves that under the condition that the state or the government controls financial resources, commercial banks do not have complete autonomy in their operations.
Foundation of governance
Why can't the state or government's control of financial resources be changed in our country? Generally speaking, it is the state-owned economy. Because the state-owned economy (including the state-controlled economy) is the foundation of the socialist economy, in other words, the "foundation of governance". In addition to confiscating the Kuomintang's bureaucratic capitalist economy and transforming the national capitalist economy, the formation of the state-owned economy in our country is mostly based on state financial investment. For many years, state investment projects have focused on the availability of construction funds, and the lack of supporting working funds has made state-owned enterprises lack working capital. Working capital relies on bank loans. Most enterprises have high debt ratios. It should be said that this situation cannot be changed. First, it is a theoretical misunderstanding: banks accumulate funds for the country; second, there are serious defects in the investment and financing system. The actual situation is that the state-owned economy and the state-controlled economy are overburdened and for other well-known reasons, they cannot make money or make more money, or even suffer serious losses, and in this situation they are not allowed to go bankrupt, they must survive, they must continue to maintain and develop, so that the state-owned economy has been in a difficult state for a long time. In order to relieve the predicament of state-owned enterprises, only external assistance, including external financing, and external financing mainly depends on banks, not only bank loans, but also the stock market. Have you ever remembered that the authoritative person once clearly put forward that the stock of state-owned enterprises should be listed first as an important channel to ease the difficulties of enterprises? In plain English, it is "listing money". Relying on external rescue and financing to ensure survival and bankruptcy, and to ensure development and continued performance, while the "burden" has not been reduced, losses continue, and while enterprises continue to lose money, the value of listed stocks declines, and financing loans are difficult to repay, resulting in a large number of financial non-performing assets. It is inevitable. It can be said that under the condition that the state controls financial resources, in order to maintain the development of the state-owned economy, the government has made finance and the economy glued together, "one prosperity and one loss", "success is finance, and failure is finance." Here we have reason to make such a prediction: if the system of protecting the state-owned economy is not reformed, and the state's control of financial resources is difficult to change, the non-performing assets of state-owned banks will not be optimistic.
Quota
Finance is the core of the modern economy, but in our country, finance has become the "money bag" of the state-owned economy. Not only enterprises lack money to find banks, but also the government needs money to find banks. Banks have become the "reservoir" to fill the funding gap. It seems that this "reservoir" will not dry up. In fact, the amount of this "reservoir" is limited, because the resources it accumulates are mainly the money of the "ordinary people". The money of the "ordinary people" comes from the monetary savings of the "ordinary people". In the case of limited monetary income and limited monetary savings of the ordinary people, banks should become the reservoir to fill the funding gap. Only by increasing the money supply and invoicing can the currency depreciate.
The current phenomenon worth noting is that there is no return on the investment of ordinary people, and there is no return on the operation of ordinary people. The stock market has continued to decline, and ordinary people have not made money in investing in the stock market, but have overall losses. Under such circumstances, why do people still deposit money in the bank, so that the bank deposits continue to grow? The usual explanation is for safety, but in fact this explanation alone is not enough. A more comprehensive and reasonable explanation is: (1) the common people are weak in profit-seeking and strong in security; (2) they are not aware of the invisible devaluation of the currency (because deposits have not become the purchasing power of reality); (3) there is additional money income, which can be made up. Some people say that our country has entered the era of negative interest rates. Under the conditions of a market economy, negative interest rates are not conducive to the conversion of savings into investment, people's choices, financial product innovation, financial marekt development, and the operation of the financial industry. However, in our country, such negative effects are not obvious. How to explain it? It should be said that under the condition that the country or the government controls financial resources, it can allocate financial resources without market prices, and it can ignore the role of interest rates in the allocation of financial resources. This shows that the allocation of financial resources in our country at this stage is still basically not affected by market supply and demand. And can not talk about efficiency.
Financial Correlation Rate
When people study the relationship between finance and economy, they often use the financial correlation rate (rpe/GDP) to indicate the degree of economic monetization. In fact, what "m2/GDP" can indicate and what it cannot indicate needs to be studied. The financial development of a country should be measured by the financial structure, which is the financial superstructure of a country. A country's economic foundation is reflected in the national wealth it owns, and the relationship between the financial superstructure and the economic foundation is reflected in the financial correlation rate.
First, the degree of marketization of financing under market economy conditions.
That is to say, when households, enterprises, and governments are short of funds, how much external financing is needed and how much internal financing is required through FIR. External financing relies on the issuance of bonds and bank borrowing. For example, the higher the ratio of bond issuance and bank borrowing to national output, the more significant the degree of separation between savings and investment, and the more significant the degree of separation between the two, the higher the degree of marketization of financing. Marketization is closely related to money, and economic monetization means the degree of connection between the real economy and the monetary economy and the degree of dependence on the market. Therefore, the financial explanation of economic monetization should mean the marketization of financing. The degree of marketization of financing reflects the development of the financial industry. Therefore, FIR is not so much the degree of economic monetization, but the degree of development of the financial industry. The development of the economy is related to the marketization of financing.
Secondly, economic development is related to the market value of financial assets.
The market value of financial assets is determined by supply and demand, and supply and demand depend to a large extent on interest rates. When the market value of financial assets rises, it means that interest rates fall, interest rates fall, which favors investment, and expansion of investment increases national output; conversely, when interest rates rise, the market value of financial assets falls, interest rates rise, which is not conducive to investment, and investment shrinks, which decreases national output. So, in a nutshell, the correlation is the interaction of a group of economic variables such as asset prices - interest rates - investment - the economy. In a market economy, the interaction of economic variables (including the market value of financial assets) depends on people's psychological expectations. In this sense, FIR reflects the change of people's psychological expectations, the proportion is higher, reflecting people's psychological expectations are "good", the effect of financial instruments on tangible wealth is increased, on the contrary, the intensity of the contraction can be said that FIR is a confidence index of people.
Third, it is necessary to express the degree of utilization of financial resources.
Over the years, the ratio of m2/GDP in our country has continued to rise, and its value has far exceeded the level of developed countries. Some people think that the degree of economic monetization in our country has increased rapidly. In fact, this is just a misunderstanding. The rapid increase in m2/GDP value cannot truly reflect the degree of economic monetization in our country. On the contrary, it reflects the waste of financial resources allocation in our country. American economist Krugman put forward an indicator, the incremental capital output rate (ICOR). The denominator of this indicator is the growth of GDP. The numerator is capital growth, that is, investment. The meaning is to increase the output of 1 yuan and how much investment to increase. If the value of m2/GDP is expressed in increments, and the increment of tons is assumed to be converted into investment, the meaning of the financial correlation rate and the incremental capital output rate converges. The value of m2/GDP in our country is about 5-8, that is, an increase of 1 yuan in GDP requires an increase of 5-8 yuan in investment, while the ratio in Western developed countries generally remains around 1-2.5, which shows that investment efficiency in our country is inefficient, and the allocation of financial resources is not economical, but wasteful.
utility maximization
Overall, China's economic and financial operations show obvious non-equilibrium characteristics. On the one hand, there is excess liquidity in the financial system, and on the other hand, it is still difficult for rural areas, small and medium-sized enterprises and other economic fields to obtain sufficient financial support. A useful way of thinking is to start from promoting the balance of supply and demand of financial resources, and explore the path and principle of maximizing the efficiency of the use of financial resources.
Finance is the most fascinating and unpredictable field in the modern economy. To some extent, it has become the foundation for the survival of human society. In 2007, major events such as the launch of financial innovative products, the entry of foreign banks, and the liberalization of rural finance made financial issues one of the most eye-catching topics. The central government has also placed the importance of financial reform to an unprecedented height. There is no doubt that in the process of more than 20 years of marketization, China's financial development has been rapid and messy, and there are many things that need to be reformed.
non-equilibrium feature
Imbalance characteristic
Overall, China's economic and financial operations show obvious non-equilibrium characteristics. This shows that there are indeed problems with the financing mechanism. The allocation of financial resources between urban and rural areas, regions and enterprises also reflects various structural imbalances. From the perspective of the demand for financial resources, this imbalance mainly includes three aspects.
residents
One is the imbalance in the supply of financial resources to residents. We often envy the prosperity of Americans, because Americans have access to an unprecedented wealth of financial products, in order to maximize their own welfare in time and space. For modern market economies, the continuous improvement of social welfare is the goal, and the availability of financial resources to residents is an important means. In our country's financial system, residents have limited access to financial resources, which is reflected in the lack of financial products and services that can be used for personal investment, financial management, and economic convenience. In addition, the government's financial policy also pays insufficient attention to residents. For example, in the reform of the stock market and the design of financial products, it still places emphasis on the interests of enterprises and the government. As a result, the wealth effect that finance should bring is seriously insufficient, and it is difficult for individuals to share the benefits of economic and financial development. Only by strengthening financial reform and policy choices oriented to residents' interests can finance have more modern service characteristics.
Corporate
The second is the imbalance in the supply of financial resources to enterprises. First of all, on the whole, the production of enterprises still lacks a stable long-term credit supply. In the middle and late stages of industrialization, the economy of scale and industrial upgrading have made enterprises often need large-scale long-term investment. In the case of underdeveloped capital markets in our country, they still mainly rely on "short-term deposit and long-term loan" commercial bank credit funds to meet. In this regard, there are two problems that cannot be ignored. On the one hand, there is a need for special long-term credit banks to provide stable financial support for long-term investment. Such long-term credit banks often have policy characteristics and are supported by special governments, such as development banks and residential savings banks. We know that the current policy banking reform is based on commercialization transformation. Here, we must pay attention to avoid policy extremes, because it is necessary to retain and develop a policy-based financial system. On the other hand, the development of corporate financing products starts with corporate bonds. The experience of various countries shows that corporate bonds are an important source of financing for the growth of enterprises. Bond market supervision and the scale of corporate bonds cannot meet the basic needs of enterprises. Only by rationalizing the mechanism and developing corporate bonds as soon as possible can we create conditions for the sustainable development of enterprises and lay the foundation for other innovations. In addition, there is a shortage of financial supply and demand for private enterprises, small and medium-sized enterprises, and rural enterprises. In this regard, an important entry point is innovative institutions. A sound financial system requires diverse institutions, and banks must also have different sizes and business fields, and allocate financial resources at different levels. The rural financial sector has been liberalized, which is an important starting point. In the future, we should further change the concept and develop various types of private Financial Institutions Groups.
local government
The third is the imbalance between the supply and demand of financial resources for local governments. In the period of rapid urbanization, it is necessary to continuously improve urban infrastructure investment, coupled with the existing government performance appraisal mechanism, so the financing demand of local governments is naturally very large. Due to the imperfect tax system and the lack of debt rights, local governments can only obtain construction funds through bank loans, land sales, or various investment companies. The first two channels will be constrained by the central government's regulatory policies, while the use of trust, securitization, project financing and other means to raise funds through investment companies will also bring about economic chaos and the accumulation of financial risks to a certain extent. It should be said that this financial imbalance will not only affect the current economic stability, but also have far-reaching negative consequences by affecting the process of urbanization. We insist that giving local governments the right to issue debt as soon as possible to make local hidden liabilities explicit always outweighs the disadvantages. In addition, a variety of urban investment and financing products should be developed in response to the needs of urbanization, including structured financial products such as packaged loans.
Enhance effective supply
From the perspective of the supply of financial resources, we should simultaneously strengthen the effective supply of indirect financial resources and direct financial resources.
In addition to institutional and policy factors, from a technical point of view, it is necessary to standardize and regulate the primary credit market while developing and improving the secondary credit market as soon as possible. In developed countries, the transfer of credit assets is very common and has become an important means of bank asset management and risk control. Objectively, credit resources can be allocated more efficiently in high-speed flow. Since 2002, our country has approved interbank credit asset transactions, and trust and financial companies have gradually intervened. However, the overall transaction scale is limited and the asset quality is not high. Many transactions are simply based on the goal of evading supervision. In the long run, the gradual establishment of a standardized national secondary trading market for credit assets is beneficial to both banking reform and indirect financial structure optimization.
Second, to increase the effective supply of direct financial resources, in addition to continuing to develop traditional stock and bond markets, it is also necessary to accelerate the innovation of various financial derivatives. What we want to emphasize is that financial innovation should pay attention to the public sector and innovation outside the system at the same time. First, a typical feature of current domestic financial innovation is government-led innovation. In the case that the independent innovation ability of Financial Institution Groups is generally insufficient and the financial marekt is not perfect, this kind of government-led innovation reflects the characteristics of low cost and high efficiency, which is reasonable for a certain period of time. This kind of government-led innovation is usually concentrated in the banking market, because the market includes the largest capital entities such as banks and insurance, and at the same time absorbs securities companies, investment funds, financial companies and even many legal entities. In addition, the government should also give more space to private financial innovation outside the system, because private independent innovation is the source of financial liberalization after all, such as Private Offering Fund and cooperative housing financing, which deserve more tolerance.
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