Zhou Chun, author of Tencent Finance and Economics

Four months after the start of the regulatory storm, on August 18, the CBRC held a recent priority work briefing meeting to introduce the progress of the "3-3-4" rectification work and the regulatory ideas for the next step.

In April 2017, the CBRC issued at least seven articles in a row and launched the "3-3-4" inspection to strongly regulate the development of the banking industry. "3, 3, 4" refers to the "three violations" (violation of financial laws, regulatory rules and internal rules), "three arbitrage" (regulatory arbitrage, idling arbitrage, related arbitrage), and "four improper" (improper innovation, improper trading, improper incentives, improper charges).

According to Xiao Yuanling, director of the prudential Regulation Bureau of the CBRC, the idea of the CBRC's rectification work is to grasp the principal contradiction and "bull's nose". At present, the three most prominent areas of banking chaos are: interbank business, financial management business, and off-balance sheet business. This is also the key area of "3, 3, 4" inspection.

He pointed out that these three major businesses have grown brutally in the past years, with a growth rate of even more than 100%, resulting in chaos, irregular management, prominent cross-correlation, and nesting each other. It is difficult to see the most basic underlying assets and ultimate risk bearers. "some are so complicated that even supervision is difficult to penetrate."

To this end, the CBRC has set a phased goal to work steadily and step by step. Adjust the daily regulatory situation, pre-evaluate, know well and have a good hand, and use the tools in the regulatory tool library to rectify the chaos, while minimizing the impact on the real economy and ensuring that the risk is manageable.

"at present, the operation of the banking industry tends to be standardized, the market chaos is gradually reduced and eliminated, and the momentum of the disintegration of banking funds from reality to deficiency has been curbed." Xiao Yuan claimed.

According to him, the growth rate of interbank business changed from positive growth to negative growth in the first half of 2017, with both interbank assets and liabilities shrinking. This is also the first "double decline" in interbank scale since 2010. At the end of the second quarter, interbank assets and liabilities both decreased by 1.8 trillion yuan compared with the beginning of the year, and the growth rates of interbank assets and liabilities were-5.6% and-2.3%, respectively.

The growth rate of bank wealth management products also dropped to single digits. At the end of June, the balance of bank wealth management products was 28.4 trillion yuan, down 1.9 trillion yuan from the beginning of the year, and the growth rate of financial management scale was 35% lower than that of the same period last year.

In the scale of financial management, the outsourced investment decreased by more than 530 billion yuan, and the balance of entrusted loans decreased continuously. In April 2017, the balance of entrusted loans declined for the first time since 2008.

In addition, new real estate loans have also declined continuously. According to reports, new personal housing mortgage loans accounted for 25.1 percent of all new loans in the first half of 2017, 10.9 percentage points lower than at the beginning of the year and nearly 20 percentage points lower than the peak of housing mortgage loans in the second half of last year.

Xiao Yuanzhang also mentioned that in addition to the obvious decrease in idling of funds, preliminary results have also been seen from the changes in the loan structure.

The growth rate of bank loans began to exceed the growth rate of assets in the same period, with total loan growth of 13.2% at the end of the second quarter, exceeding the growth rate of total assets by 1 percentage point for the first time since 2015.

In addition, the growth rate of manufacturing loans has also changed from negative to positive, maintaining positive growth for six consecutive months, which means that more bank funds are flowing to the real economy represented by the manufacturing industry.

Xiao Yuanzhang concluded that it is impossible to rectify market chaos overnight. The causes of market chaos are complex and the time span is relatively long. Regulators need to have ways and means first, fast and slow, rather than a simple one-size-fits-all. "We must follow the steps, do it accurately, do it in a down-to-earth manner, and work step by step."

With regard to the current progress of the "3: 3-4" inspection, Li Lin, deputy director of the on-site Inspection Bureau of the CBRC, said that at present, the self-examination of banking financial institutions has been basically completed, and the inspection of regulators at all levels is also coming to an end. The CBRC is collecting, collecting, and analyzing various aspects of the situation.

In the next step, the special governance work will be promoted from the following three aspects in accordance with the work plan. First, carry out problem rectification and reform. Urge banking financial institutions to investigate and reform, investigate and reform at the same time, draw lessons from others, dig deep into the root causes of the problems, "check leaks and fill gaps" in all directions, earnestly enhance the awareness of discipline and law-abiding, and strive to build a culture of internal control and compliance.

The second is strict supervision in accordance with the law. We must pay equal attention to confiscation of illegal gains and fines, carry out both institutional and personnel penalties, crack down on all kinds of violations of laws and regulations, and resolutely deal with all kinds of banking chaos.

The third is to make up for the deficiency of supervision. In view of the problems found in the special governance, we should strengthen the top-level design, make up for what we lack, and improve the laws and regulations. At the same time, we should further strengthen the enforcement and binding force of the system, comprehensively enhance the effectiveness of supervision, and strictly adhere to the bottom line that systemic financial risks will not occur.