Joe Chan talking about the financial industry away from the main business: "other people's fields planted himself shortage of land."

By the State Council Development Research Center, China Development Research Foundation hosted "2017" was held in Beijing on March 18。  China Insurance Regulatory Commission Vice Chairman Chen Wenhui at the forum said that the current Chinese financial industry's six major risk concern: First off a real risk to the virtual; second is the financial risk of deviation of the main industry; Third, the risk of failure of corporate governance; Fourth radical risk management; Fifth, the risk of asset-liability mismatch; Sixth liquidity risk。  For the financial risk of deviation of the main industry, Chen said, forget the origin of some financial institutions, away from the main business, blindly engage in diversified, fully licensed, staking keen to earn quick money, the main industry is not the main cause, not vice sideline, there even he planted someone else's land, shortage of their own land。This phenomenon exists in all areas of the financial industry in varying degrees with some even avoid regulation by way of external channels, etc., table, if mishandled big risk there will be。  Chen Wenhui suggest that to effectively prevent and control the risks faced by the financial sector, there is a general requirement is to strengthen and improve the regulatory。  The following is the speech Record: Joe Chan: Dear Mr. President, ladies and gentlemen, Hello everybody afternoon!I would like to take this opportunity to talk about the financial system risks and deal with today's problems。  First off real to imaginary risk: the financial sector China currently has six major risk concern。This is a matter of fundamental direction of the industry and the financial industry risks For。If the financial sector out of the real economy, excessive self-circulation, will lose its profitable basis, the last will inevitably systemic risk。This is the deep-seated causes of the US subprime mortgage crisis, and had to pay by the financial。  China's economy is facing financial problems and imbalances in the real economy。Speaking just easy to chairman in 2016 China's financial industry accounts for the proportion of 8.3%。2016, net financial industry reached 2.0286 trillion yuan, and net profit of 2.3158 trillion yuan over the same period the national state-owned enterprises is roughly equivalent。This data may also explain the financial sector doing well。This data also shows that the financial sector funds idle money to money speculation phenomenon to some extent is there; the second is the financial industry deviated from the main business risks。This is a strategic risk level, have an impact on the overall enterprise, the industry will。Forget the origin of some financial institutions, away from the main business, blindly engage in diversified, fully licensed, staking keen to earn quick money, the main industry is not the main cause, not vice sideline, and some are even planted someone else's land, shortage of their own ground。This phenomenon exists in all areas of the financial industry in varying degrees with some even avoid regulation by way of external channels, etc., table, if mishandled big risk there will be。  Third, the risk of failure of corporate governance。This is a major risk at the operational level。Financial institutions can change money on a piece of paper, there is a strong public and huge externalities。If the shareholding structure is irrational, poor oversight, corporate governance may distort, internal and external supervision will fail, financial institutions are likely to be the individual who actually control, or even become their private interests to achieve the ATM or financing platform。Once the risk of large, often end up to pay the whole of society; Fourth aggressive risk management。Originally gives financial institutions are well-organized, document image management。However, there is a bad phenomenon now, is that different types of financial institutions, regardless of the risk, one-sided pursuit of profit, blind comparisons on the rate of return。In fact, if we take risks, liquidity and other factors to consider as the weighting of different types of financial products yields have its rationality, not the higher the better。  Fifth, the risk of asset-liability mismatch。Financial institutions' balance there are some mistake on the deadline, with the structure is normal and is a source of profit。But from practical point of view, some financial institutions to go through channels, plus leverage, etc., greatly exacerbated the extent of asset-liability mismatch, artificially increasing the financial markets with short money long, long money short with risk。Recently, some do engage in information management products pools of capital, hidden great risk; Sixth liquidity risk。This risk is mainly a representation, or reflect other risks results。Some financial institutions away from the main industry, the radical operation but do not pay attention to the rational allocation of assets and liabilities, even misappropriation of funds, and finally it is likely to lead to liquidity risk。  Currently, financial security has become an important cornerstone of national security。We in response to the financial risks, it is necessary to grasp the basic law, but also from the reality of China, to new ideas, the courage to play, as the initiative。  First of all, it is to really establish a sense of the real economy。The real economy is the foundation of this, for in the mid-industrialization of China even more so。To serve the real economy as an important strategic positioning, as a basic rule, implement the various areas of finance, to ensure that the industry do not make the wrong direction。Financial innovation must be to improve the operating efficiency of the real economy as the goal, we must resolutely prevent the money money speculation, the phenomenon of self-expansion cycle。  Secondly, we must go back to basics, focus on core business。Industry specializing in surgery, a big difference between the real economy and the financial。The real economy in unfamiliar territory, the financial industry is often difficult to do。Similarly, the gap between the internal financial industry is not small, and some financial institutions to do their own thing yet, but the grass is greener on the mountain, thinking about the short cuts。From domestic and international experience, a true evergreen business tend to focus on core business, deep plowing market。Only the financial sector back to basics, focus on core business, in order to truly improve the core competitiveness。  The third is to effectively improve the corporate governance mechanism,。Strong financial institutions as a public company dispersed ownership requirement is reasonable and legitimate。In addition, management should regulate the terms of reference。For example, for large shareholders to have a certain constraint as chairman, CEO try to be professional managers, both for the operation of corporate governance norms, but also help to develop a real financiers; Fourth, continued to adhere to sound business。  To effectively prevent and control the risks faced by the financial sector, there is a general requirement is to strengthen and improve the regulatory。This time, the recent international financial crisis occurs there is an important reason is that the regulatory authorities turn a blind eye to risks。Prevention and control of financial risks, regulatory responsibility, bear the brunt。To be filled by a sound regulatory system short board, strengthen supervision and coordination, the implementation of draconian laws, so that the regulatory eye teeth grow fangs, really take responsibility, be sure to let illegal who pay a heavy price: only make him afraid, to make him give up the idea of speculation。I believe that with the transformation of China's economic reform, and gradually improve, continue to strengthen financial supervision, financial market risk rules will be able to get effective prevention and control, finance will also play a role in the bigger and better serve the real economy。