Zhou Xiaochuan: Proper management of spreads to regulate the enthusiasm of banks

Governor Zhou Xiaochuan attends "Oxford China Financial Forum" and delivers a speech to adjust direct financing and indirect financing ratio through a set of interest rates Li Central bank Governor Zhou Xiaochuan said yesterday that central banks needed to provide an incentive system for the entire financial system to support the real economy.　　In the application of concrete tools, it is not enough to pay attention to the policy interest rate, and should properly manage the spreads to regulate the enthusiasm of the banking to provide service to the real economy. Zhou Xiaochuan made the above remarks at the Oxford China Financial Forum.　　In his view, in the early days of the financial crisis, many countries quickly lowered interest rates to 0 or nearly 0, while 0 interest rates could weaken banks ' services to the real economy. In fact, after the crisis, many countries in Europe and the United States complained that the financial system did not contribute enough during economic recovery.　　If the bank's savings cost is zero, Mr Zhou argues, the banks are not under pressure to lend. Mr Zhou also said that a key factor in the financial system's ability to serve the real economy better is the health of financial institutions. Financial institutions, if they are seriously ill in a crisis, will be hospitalized and repair their balance sheets, so there is insufficient support for the real economy and insufficient support for employment.　　The central bank should regulate the resilience of the financial system. On the discussion of China's spreads, Zhou Xiaochuan stressed that because of China's operating environment, operating environment and legal environment with the developed countries there is a gap, so we can not compare spreads with developed countries.　　By comparison, the spreads in emerging market countries are generally much larger than in China. "One approach is for the central bank to have only one policy interest rate, the other to make the market natural, and the other to properly manage the spreads, which may regulate the willingness of the banking sector to provide services to the real economy, as well as the ability of the banking sector to repair itself." In this way, this enthusiasm may need to be adjusted, so in the incentive system, the central bank may need to do more. "And for some structural problems in the incentive system, the central bank can do more."　　Mr Zhou believes that the proportional relationship between direct financing and indirect financing can be adjusted through a set of interest rates. "For example, big companies issue corporate bonds, interest rates do not have a lower limit, but bank loans have lower interest rate management." This would encourage large companies to choose to issue corporate bonds, thereby encouraging direct financing.　　"he said. In addition, the current inflationary pressure still exists and the economic growth slowed down the signal of the complex environment, the fate of monetary policy is a concern, the central bank to adopt a single target system or Multi-target system also sparked discussion.　　Mr Zhou argued that the central bank would be better off with a multi-target system and a change of weight as it shifted over the different stages. He noted that in a stable macroeconomic environment, the central bank's task is relatively simple, through effective communication with the public to guide inflation expectations, maintain low inflation rate, investment will increase, economic and employment can also be promoted, but at some stage, these objectives will be conflicting, can not be raised simultaneously, The focus of the central bank and the tools to be used must also be switched to cope.