The trend of gradual integration of banking, securities and insurance. Because there are big differences in operations between banks, securities and insurance, they are unified, can be accepted by all parties, and develop meaningful new regulatory tools! Banks, the three pillars of the national financial system, Analysis of the alliance between securities and insurance
In May 1995, Dai Xianglong, governor of the People's Bank of China, proposed two reform measures in response to the financing dilemma of my country's securities firms: First, allow qualified securities firms to enter banks. The inter-bank lending market and the bond repurchase market; the second is to allow qualified securities companies to borrow from banks through pledge of service notes ("Financial Research" Issue 10, 1999.) In 1998, insurance companies were allowed to participate in the inter-bank bond market. In 1999, the China Insurance Regulatory Commission issued administrative measures for insurance companies to purchase central enterprise bonds, linking insurance companies and securities companies. After several years of reform, banks, securities, and insurance have gradually expanded the outline of the alliance and created a new era of finance.
1. Feasibility analysis of banking, securities and insurance alliances
Institutional innovation is one of the main factors in the development of modern finance. China is about to join the WTO, and the pace of opening up of the financial industry will be further accelerated. If Chinese financial institutions want to remain invincible in the competition, they must continue to reform the financial system. At the same time, it is necessary and possible to establish a banking, securities, and insurance alliance for the reasons of my country's securities and insurance companies.
(1) Financing channels for securities companies are narrow. As financial enterprises, securities firms are engaged in the underwriting business of issuing stocks of listed companies; they are engaged in the merger and acquisition intermediary business of acting as planning consultants for corporate mergers and acquisitions; they are engaged in the self-operated business of buying and selling securities with their own funds and making profits, and they are also engaged in collecting commissions , a brokerage business that facilitates investors to complete transactions. These are destined to have huge demand for funds. There is less external funding. According to past regulations, our country's securities firms cannot borrow from banks, issue bonds, or conduct treasury bond repurchases in the interbank market. In fact, securities companies have only one external financing channel, which is only one-day lending in the interbank market. This kind of overnight lending is like a drop in the bucket and has minimal effect on the long-term development of securities companies.
Financial constraints put securities firms at risk. Brokerage risk refers to the risk arising from the raising and application of funds, that is, the possibility of losses caused by uncertainty in the raising and application of funds by securities firms, as shown in: (1) Liquidity risk, which refers to the liquidity ratio of a securities firm. If it is too low, its financial structure lacks liquidity. When operations are adverse, because financial products cannot be liquidated quickly, securities companies lack sufficient liquidity and fall into a financial turnover crisis. According to statistics, by the end of 1996, none of the top ten securities companies in China had a liquidity ratio close to 90%, while the ratio of Morgan Stanley in the United States was 98%. (2) Capital adequacy risk. my country's maximum limit on the net asset-liability ratio of securities firms is 10:1, and the net asset ratio of some small and medium-sized securities firms is too high. Once operating difficulties occur, these securities firms will first fall into insolvency and even face greater capital adequacy risks.
(2) Insurance funds need to be broadened through channels. With the increase in national income and the strengthening of people's insurance awareness, China's insurance industry has made great progress in recent years, and the premium income of various insurance companies has grown significantly every year. In 1997, my country's premium income was 107.2 billion yuan, an increase of 20% over the previous year. In 1998, my country's premium income was 124.7 billion yuan, an increase of 14% over the previous year. The growth rate is very fast. According to predictions by relevant departments, the total revenue of China's insurance industry will likely exceed 200 billion yuan before 2000, and its market potential is as high as 250 billion yuan in scale. Such a huge amount of funds is faced with restrictions on the way funds are operated, intensified competition between investment returns and companies, and contradictions between investors' requirements for higher return rates on insurance investments. Long-term life insurance funds have two basic characteristics: savings and deferred payment of expected premiums. Due to the long time interval between premiums and benefits, insurance companies must maintain and increase the value of insurance funds in order to ensure benefits for several years or even decades and meet the expected needs of policyholders. Therefore, it is the need of insurance itself to enable insurance funds to maintain and increase their value, and the fundamental way to maintain and increase their value is to make full use of insurance funds and expand investment channels for insurance funds.
For a long time, the use of insurance funds in my country has been restricted, and can only be deposited in banks. This has been relaxed in the past two years, and it is also limited to the purchase and sale of government debt and financial bonds. Therefore, in our country, the difference between interest on deposits and government bonds and the predetermined interest rate on insurance policies has become the main source of income for insurance companies. Although the proportion of insurance companies investing in treasury bonds is currently increasing, due to the small scale of treasury bonds itself, which restricts the scale and proportion of investment, a certain proportion of funds are still invested in banks. In this way, since 1997, bank savings deposit interest rates have been cut seven times, causing great losses to insurance companies. In the long run, the solvency of insurance companies will be shaken. With the development of world economic integration, China's accession to the WTO is accelerating, which requires member countries to play their cards according to WTO rules, that is, China's insurance industry must speed up the pace of opening up. Reduce income standards and increase investment income, thereby improving your core competitiveness in the insurance industry where there are many strong players.
In order to solve the phenomenon of narrowing or even inversion of insurance fund spreads due to the reduction of bank deposit interest rates, only effective use of funds through multiple channels and increasing the rate of return on funds are the key to solving the inversion of insurance fund spreads and the long-term development of insurance companies in the future. In countries with relatively developed market economies, the insurance industry's ability to accumulate and finance is second only to the banking industry. For example, the business volume of insurance companies in the United States accounts for more than one-third of its financial market business. Therefore, from a long-term development perspective, China's insurance industry's capital utilization needs to undergo major development in both form and means.
(3) The scope of banking business needs to be broadened. Since 2000, financial regulatory agencies have encouraged commercial banks and insurance companies to engage in business innovation and agency business. Banking business can be expanded in the following aspects for insurance business and securities business:
1. More than 80% of foreign bank insurance business is handled through market intermediaries, that is, agency brokers. Our country must also make full use of the characteristics of banking businesses, which include a wide range of businesses, relatively high-quality personnel, and familiarity with the insurance industry, to vigorously develop agency insurance business.
2． With the development of electronic network technology, banks and insurance industries can share network resources. Insurance companies can choose to use the customer resources and information libraries owned by banks, and banks can act as financial advisors to insurance companies and provide custody services for funds.
3． Insurance companies can provide insurance services for bank products such as consumer credit, personal mortgage loans and car mortgage loans.
4. As a kind of marketable security, insurance policies can be used as effective pledges for bank loans. How to combine savings certificates with insurance policies and funds can also be studied.
5． In terms of financing business, insurance companies are large depositors of banks and may become major investors in bank financial claims in the future. Banks and insurance companies can mobilize funds through interbank lending, bond repurchases, etc. to improve the liquidity and yield of funds. .
6． Banks and securities can engage in interactive marketing and share marketing networks and customer resources. Banks have an extensive customer base and branch network and can use existing networks to develop securities, fund and insurance businesses.
2. Analysis of alliance methods of securities, insurance, and banks
Through the feasibility analysis of the alliance between the above three, it is necessary for us to propose specific methods of alliance.
(1) Selection of alliance methods between insurance funds and securities markets. Since 1997, RMB savings deposit interest rates have been cut seven times. Among them, the one-year bank deposit interest rate has dropped by 7%, and the three-year and five-year deposit interest rates have also dropped by the same amount. The drop is unprecedentedly large. Compared with the current bank deposit interest rates, insurance companies have seen an obvious inversion of interest rates. The environment for the use of insurance funds has deteriorated, and the operations of the insurance industry have encountered unprecedented difficulties. The call for expanding long-term life insurance fund utilization channels is growing day by day in the industry. At the same time, China's securities market still has problems such as its small scale and lack of stable funding sources. How to solve the above problems has attracted the attention of the government and the securities industry, and has become an urgent issue for managers to solve.
The investment methods of insurance funds in my country can adopt the following methods:
1. Implement asset-liability ratio management. Determine the reasonable use structure of insurance funds according to the fund use cycle to ensure the safety and efficiency of funds. Use short-term liabilities such as unexpired liability reserves and outstanding claims reserves for short-term high-definition investment business, such as commercial bills; use personal insurance reserves that are medium and long-term liabilities except for a small amount to cope with irregular changes in liquidity. , most of which can be used for medium and long-term investments, such as government bonds, financial bonds, corporate bonds, etc.; total reserves and underwriting surplus, the most suitable funds for medium- and long-term investments, can be used to purchase high-quality stocks, real estate and mortgages in the secondary market Loans etc.
2． Insurance companies purchase securities funds directly. That is, when subscribing or purchasing various securities investment funds in the primary market and secondary market, the insurance business authorities at the same level should strictly limit the investment proportion to ensure the safety and efficiency of insurance funds and protect the interests of investors.
3． Establish a securities investment insurance fund. Securities investment insurance funds are currently a major operating method used by more developed countries in the capital market to solve insurance company capital investment channels. Taking into account the actual situation in our country, qualified insurance companies can be allowed to establish securities investment insurance funds, and the amount of capital issued by them should be determined as a certain proportion of their total assets. This method can be initiated by securities companies and trust investment companies to establish new insurance funds. Fund management companies can also choose established fund management.
(2) Choice of alliance methods between banks and insurance companies. Once China's insurance market is opened to the outside world, foreign-funded insurance companies will inevitably have an impact on Chinese national insurance companies with their advantages in asset strength, marketing methods, management technology and other aspects. With the increase in the way insurance companies use funds and the improvement of risk awareness, the cooperation between the insurance industry and commercial banks is no longer limited to simply collecting premiums and obtaining deposits. It mainly includes the following aspects:
1. In terms of financial cooperation. At present, the State Council has announced that insurance funds can indirectly enter the stock market through securities investment funds, and the People's Bank of China has also decided that commercial banks can pilot agreement deposits with insurance companies. As far as life insurance is concerned, life insurance benefits are not as unpredictable as property insurance and liability insurance. The investment strategy mainly focuses on the long-term stable growth of value, so it reflects positively on the agreement deposit business launched by commercial banks.
In addition, in the process of integrating with international practices, insurance companies must avoid the risk of concentrated funds and transfer part of the funds from the four major commercial banks. Banks must seize this opportunity and make full use of the powerful means of opening agreement deposits to cooperate with Life insurance companies carry out financial cooperation.
2. Business cooperation. Foreign life insurance products have completely transformed from mainly savings products to mainly investment products. Domestic life insurance companies are currently exploring and working hard on product innovation. Recently, life insurance companies have launched a very attractive product. Due to the unique investment and financial management functions of this product on the basis of insurance protection, it has attracted a group of investment-minded policyholders. Banks should focus on product development and marketing. , combined with the development of private financial management business, to strengthen cooperation with life insurance companies. At the same time, my country's commercial banks can use their network advantages to vigorously develop insurance agency business and increase insurance fund deposits and corresponding operating income.
3． Technical cooperation. Banks should take advantage of life insurance companies to introduce advanced foreign management experience and marketing methods, accelerate technological innovation, and jointly develop technical support systems by issuing co-branded cards with life insurance companies, expand telephone banking and online banking services, and establish long-term mutual benefits for both parties. Mutually beneficial cooperation and strive for the same customer groups of the two countries.
(3) Choice of alliance methods between banks and securities firms. At present, banks and securities firms have made a good start in cooperating with investment banking businesses, and have accumulated successful experience in bridging loans. In terms of securities transaction clearing, banks can apply for clearing qualifications from the stock exchange. On the basis of developing the above businesses, our country's banks should expand banking and investment banking businesses in a broader field:
1. Develop asset securities business. Asset securities business is the process of transforming financial assets that generate current and future income cash flows into securities that can be sold and circulated in the capital market. In the process of securities trading, the original equity holder (originator) sells the assets to a vehicle (issuer) established for the purpose of securitization. The issuer uses the cash generated by the assets as collateral to issue secondary securities to investors. Asset-backed securities circulating in the market are used to purchase assets transferred by the original equity holder, and the carrier trustee uses the cash flow generated from the transferred assets to pay investors. This business can improve the liquidity of bank assets and provide new ideas for banks’ asset and liability management. Banks can provide securitized assets to securities companies and conduct securitized asset evaluation and program planning, while securities companies can play a role in overall planning, planning and innovation of trading tools, and trading of securitized assets.
2. Develop fund custody business. At present, my country's fund industry has achieved great development, such as securities investment funds in the stock market, social welfare funds, and social security funds have been transferred to market-oriented operations. For credit reasons, such funds very much hope that banks will enter . Specific methods: The fund signs a fund management agreement with a securities firm, and requires the securities firm to open a custody account at the bank to understand the changes and operations to prevent risks. The bank can explore this business and use the bank's account management function and credit to provide customers and securities firms with Build a bridge, collect handling fees from it, and also increase deposits.
3． Financing business with listed companies. When a company needs working capital, banks can provide bridging loans guaranteed by securities companies to provide collection, settlement and other services for listed companies; when the company is in the process of backdooring or buying a shell to go public, banks can cooperate with securities companies to help with the backdooring process. Or the shell company selects the shell source company in the capital market and helps plan the operation plan. Within the scope permitted by the state, it provides financial and project information support to the backdoor or shell company; when a listed company carries out allotment of shares, the securities company acts as the allotment As underwriters, banks can participate in the design of allotment plans and recommendation of allotment projects, and provide guaranteed bridging loans and collection of allotment funds; when the company carries out shareholdings, banks can provide recommendations on merger and acquisition projects and leveraged financing and other services.
3. Conclusion
When huge amounts of bank credit funds cannot find loan targets, and when commercial bank deposit interest rates fall again and again, the entire capital market is obviously facing a situation of oversupply. However, the financing of securities companies has been in crisis; the premium income of my country's insurance companies has increased significantly every year, but the huge funds cannot fully maintain or increase their value due to narrow financing channels; at the same time, my country's commercial banks have a narrow business scope and cannot fully utilize it. Its network is wide and has a large amount of information. Banks, securities and insurance are contradictory and complementary to each other in the capital market. Therefore, an effective chain can be found to connect the three and give full play to their own advantages.
(Guoyan Information)
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