Five ministries and commissions issued 30 financial measures to combat the epidemic and increase monetary and credit support

As the prevention and control of the pneumonia epidemic caused by the new coronavirus infection enters a critical stage, the potential impact of the epidemic on the macroeconomy and financial markets has also received increasing attention. In order to stabilize market confidence, on February 1, five ministries and commissions including the central bank, the Ministry of Finance, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange jointly issued the "Notice on Further Strengthening Financial Support to Prevent and Control the Pneumonia Epidemic of Novel Coronavirus Infection" and introduced 30 measures. Focus on increasing monetary and credit support, maintain reasonable and sufficient liquidity, strengthen financial support for key medical supplies and daily necessities production enterprises, better meet the people's normal financial service needs, and win the battle against epidemic prevention and control, safeguard Provide strong support for the overall situation of economic stability and development.

Some industry insiders interviewed called for the overall impact of the epidemic on the economy not to be ignored. From a structural point of view, the negative impact on the service industry is expected to be greater in the short term, and the financial industry is increasing its impact on the economy. While supporting epidemic prevention and control work, we must also provide financial support to distressed enterprises and reasonably adjust maturing financing arrangements. To implement a more proactive fiscal policy, monetary policy must also be planned in a timely manner and implemented appropriately in advance according to the development of the epidemic.

Quickly respond to epidemic prevention and control

Financing needs

Although the financial market officially opened on February 3, financial measures to respond to epidemic prevention and control during the Spring Festival It has been implemented one after another, especially banking and insurance institutions, which have already stepped up their actions. On January 26, the China Banking and Insurance Regulatory Commission issued the "Notice on Strengthening Financial Services of the Banking and Insurance Sectors to Cooperate in the Prevention and Control of the Pneumonia Epidemic of New Coronavirus Infection", which included information on differentiated preferential credit support, financial services for distressed enterprises, etc. The deployment is consistent with some of the contents in this "Notice".

“Financial support for epidemic prevention and control mainly focuses on two aspects. First, it fully supports the current epidemic prevention and control work, including ensuring payment and settlement of funds for specific purposes and providing credit to enterprises involved in epidemic prevention and control. There is a need to open green channels and speed up insurance claims; on the other hand, we need to prepare in advance for the impact on the real economy in a certain period of time," Zeng Gang, deputy director of the National Finance and Development Laboratory, told a reporter from the Securities Times.

The "Notice" proposes that during the epidemic prevention and control period, the production, transportation and sales of medical protective clothing, medical masks, medical goggles, new coronavirus detection kits, and negative pressure ambulances used in response to the epidemic will be restricted. , disinfection machines, 84 disinfectant, infrared thermometers and related medicines and other important medical supplies, as well as key enterprises that provide important daily supplies implement list management. The central bank provides low-cost funds to financial institutions through special re-lending, and supports financial institutions in providing credit support at preferential interest rates to companies on the list. The central government provides interest discount support to key enterprises for epidemic prevention and control.

The reporter learned that currently all major banks are making arrangements in accordance with the relevant requirements of the regulatory authorities. For example, in response to the credit support needed by enterprises and institutions involved in epidemic prevention and control, many banks have opened green channels to simplify the credit fund approval process and provide appropriate interest rate concessions. The China Development Bank has established an emergency financing service mechanism for epidemic prevention and control, with clear daily schedules. Emergency response must be completed within 24 hours for financing needs raised by central and local epidemic response leading groups or headquarters and their member departments; other parties involved in epidemic prevention and control must complete the emergency response within 24 hours. To control the financing needs raised by relevant enterprises, emergency response must be completed within 48 hours. The interest rates for operating loans provided by Agricultural Bank of China, China Construction Bank, etc. to small and micro enterprises and individual industrial and commercial households in Hubei Province will be reduced by 0.5 percentage points on the current basis.

According to Pan Gongsheng, deputy governor of the central bank, during the epidemic prevention and control period, the central bank will provide a total of 300 billion yuan in low-cost funds to major national banks and some local corporate banks in key provinces (cities, districts) such as Hubei. Special re-loan funds require banks that obtain re-loan funds to provide credit support at preferential interest rates to enterprises that produce important medical and daily supplies in response to the epidemic. On the morning of January 31, the central bank convened a meeting with relevant banks, requiring commercial banks to proactively strengthen docking with relevant enterprises on the list, provide sufficient credit resources, and fully meet the reasonable financing needs of key enterprises.

Protecting distressed enterprises

and personal financial needs

During the special period of epidemic prevention and control, in addition to ensuring the financing of enterprises and institutions directly involved in epidemic prevention and control, In addition to demand, the daily basic financial services of the people and the financial needs of distressed enterprises and individuals also need to be guaranteed in a timely manner.

The "Notice" emphasizes the need to ensure the smooth flow of basic financial services. For example, to ensure the smooth operation of payment and clearing, the central bank will relax the business limits of the small-amount payment system, extend the operating hours of the large-amount payment system and the central bank's centralized accounting data system, and support financial institutions to handle RMB deposits and other services online. Open special channels for epidemic prevention and control to ensure that domestic and overseas rescue and donation funds are allocated in a timely manner and social funds flow efficiently and smoothly. Encourage clearing institutions, banking financial institutions and non-bank payment institutions to provide payment service fee discounts to special merchants in specific fields or regions.

For distressed individuals, loan repayment arrangements are also expected to be adjusted accordingly.

The "Notice" clarifies that financial institutions must provide appropriate credit policies for those who are hospitalized or quarantined due to infection with new pneumonia, those who need to be quarantined for epidemic prevention and control, those who participate in epidemic prevention and control, and those who have temporarily lost their source of income due to the impact of the epidemic. Tilt and flexibly adjust the repayment arrangements for personal credit such as housing mortgages and credit cards, and reasonably postpone the repayment period. Personal entrepreneurial guaranteed loans infected with the new coronavirus can be extended for one year and continue to enjoy financial discount support.

Judging from the current policy measures issued by regulatory authorities and banking and insurance institutions, they are mainly focused on financial support for epidemic prevention and control and ensuring social stability. However, as the epidemic prevention and control work deepens, its impact on the macro economy The impact is gradually attracting attention. Some industry insiders call for economic and financial policies to respond in advance to the impact on the real economy in a certain period of time.

“From the perspective of economic structure, the industry most affected by the epidemic is the tertiary industry. Service industries such as consumption, tourism, and entertainment will be greatly affected in the short term. These are also areas where small and micro enterprises gather and employment is intensive. "It is expected that small and micro business operations and personal employment will face certain pressures in the future, and some small and micro businesses will even suffer losses, which will lead to tight cash flow." Zeng Gang said that in order to deal with these problems, on the one hand, we must continue to increase measures. loan strength for small and micro enterprises; on the other hand, for small and micro enterprises or individuals who already have loans, if the epidemic has an impact on their income sustainability and causes repayment difficulties, banks should consider loan restructuring and other methods to optimize repayment. During the loan period, make sure there is no loan withdrawal or loan pressure.

The "Notice" also makes it clear that for industries such as wholesale and retail, accommodation and catering, logistics and transportation, and cultural tourism that have been greatly affected by the epidemic, as well as enterprises with development prospects but temporarily experiencing difficulties due to the epidemic, especially Small and micro enterprises are not allowed to blindly withdraw loans, cut off loans, or suppress loans. For enterprises severely affected by the epidemic that have difficulty repaying their loans when due, they can extend or renew their loans.