National capital is the capital formed by investing state-owned assets in enterprises from government departments or institutions that have the authority to invest on behalf of the country.
No matter what government department or institution invests, as long as it is invested with state funds, it will be regarded as state capital.
State capital currently occupies a dominant position in our country and is the material and technical basis for socialist modernization.
For a long time, the main investment entities in my country's fixed asset investment field have been unclear, and the investment risk awareness of project investors has not been established, resulting in excessive investment scale, serious duplication of construction, and low investment returns.
To this end, in order to deepen the reform of the investment system, establish an investment risk restraint mechanism, effectively control the scale of investment, improve investment efficiency, and promote the sustained, rapid and healthy development of the national economy, the State Council decided in Guofa [1996] No. 35 that from 1996
At the beginning, a capital system was piloted for fixed asset investment projects.
Expanded information Banks’ existing capital supplement tools mainly include equity financing, convertible bonds, preferred shares, and secondary capital bonds.
Among them, the threshold of secondary capital bonds is low and the volume is large, while the primary capital is relatively weak and there are loopholes in the bank's capital supplement structure. Therefore, the issuance of perpetual bonds by banks is of great significance.
Experts in the industry generally believe that the issuance of perpetual bonds can alleviate the current capital replenishment pressure in the banking industry, especially for unlisted small and medium-sized banks to replenish non-core tier one capital, and promote the business of city commercial banks, rural commercial banks, and rural credit cooperatives to gradually return to their roots.
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"In fact, under the current relatively loose financial environment, the cost of issuing capital instruments is also relatively low. In the past, the issuance of preferred shares required the approval of multiple departments, and the issuance efficiency of preferred shares was low. Now perpetual bonds may replace preferred shares.
As another channel to supplement Tier 1 capital instruments, perpetual bonds may be expanded to a large extent in the future to supplement the Tier 1 capital adequacy ratio by one percentage point," Wang Yifeng said.
It should be pointed out that although the state has lowered relevant entry barriers in terms of policies and helped banks broaden their financing channels, efforts from all parties involved are still needed.
Wang Yifeng suggested that commercial banks themselves need to make corresponding capital planning.
As far as regulatory agencies are concerned, it is necessary to further promote the enrichment of investor groups and promote the overall coordination of the corresponding legal, accounting and other systems for the entire capital instrument.