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"Debt" of

Author: ZhangYanFeng LuoBo Wang From: www.yourpaper.net Posted: 2007-11-21 04:59:08 Read:
Abstract: In order to alleviate the debt burden of the state-owned enterprises, to defuse the risk of the assets of state-owned commercial banks to set up financial assets management companies is one way; under the current conditions of economic and social credit background, the debt-equity swap role can not be overestimated; operation problems, and improve and perfect their implementation approaches.

In order to resolve non-performing assets of state-owned banks, and defuse financial risks; alleviate the debt burden of the state-owned enterprises to improve the structure of the balance of the state-owned enterprises; promote the state-owned banks and state-owned enterprises continue to deepen reform, the Party Central Committee, the State Council made establish a financial asset management company, the disposal of non-performing assets of banks in accordance with the law on the part of the bank loans of the state-owned enterprises, financial asset management companies as investment subject to the implementation of the strategic plan of the debt to equity (hereinafter referred to as the debt-equity swap).

First, the main problems in the debt-equity swap in the operation process

Debt-equity swap work to carry out the first of its kind in our country, the lack of specific operations experience, especially in our current specific economic, financial and social credit environment, the actual operation of this work will encounter various issues, must be taken seriously and resolve as soon as possible, in order to ensure the smooth implementation of the policy.

(A) debt-equity swap on the parties different interests effectiveness, thereby deviation stakeholder understanding and awareness of the debt-equity swap, which affects the specific operation and the actual operation of the debt-equity swap. The implementation of the debt-equity swap involves four stakeholders: Economic and Trade Commission as the representative of local government, enterprises as the mainstay of the debtor, as the main commercial bank creditors, financial asset management companies as the main stage equity .

Due to different interests, the operation of the debt-equity swap, the parties understand and recognize the difference. According to the survey, most corporate debt-equity swap as a kind of preferential policies to understand, trying so hard to catch this train. Local Economic and Trade Commission in determining those enterprises, is squeezed into the big list of the State Economic and Trade Commission, the key choice for the number of loans "enterprises and enterprises in difficulty, whether a company is a state-owned enterprise, whether 1995 adverse loans, enterprise product quality and marketability, the quality of the leadership team as well as restructuring of many factors such as whether the policy requires considering not many. All commercial banks to provide the list of enterprises to repayment hopeless, the heavy burden of non-performing loans of enterprises mainly try to peel off non-performing loans, refused recommended for enterprises operating normal. Financial asset management companies require strict compliance with the spirit of the 12 central document consideration Swap of Debt, and comply with the conditions of most of the normal operations of the enterprise. Understanding of the debt-equity swap and cognitive bias affect the debt-equity swap operation and after the actual run.

(B) debt-equity swap specific operation and actual operation, there have been problems that may arise.

1. The majority of reported companies do not fully comply with the conditions of the debt-equity swap.

By the provisions of the policy, the debt-equity swap enterprise reporting work completed by the Economic and Trade Commission in accordance with the bottom-up procedures around the government the benefit of the regional economy, and actually reported the basic situation of enterprises and the number of mostly did not comply with the relevant conditions and far more than the amount of the consideration of the conditions. Increase unnecessary workload on the one hand, on the other hand, most companies can not enjoy this policy, the actual formation of the debt-equity swap "thunder and small raindrops.

2. The debt-equity swap in the implementation process, some moral hazard.

From years of reform in China practice, every major economic reforms, there will always be some people drill reform loopholes in order to reap the interests of individuals or small groups, many of the "good by" is often confused ideas. So, despite the introduction of the original intention of the debt-equity swap is good from the "allowance for doubtful economy towards an economy based on credit, but prior design is not good, the implementation process will be errors. Some of this can do their best old enterprise, is also actively into the ranks of the 24 into the debt-equity swap, making progress, the depreciation of the bank debt. Moreover, some enterprises are still capable of normal interest payments due to waiting for the debt transfer, also stop the delivery of normal interest on loans to banks.

3. By the double impact of social decline in credit and debt-equity swap work ethic risks, blocked normal commercial bank credit.

The one hand, some enterprises by Ƿ more, the more favorable the erroneous ideas of the principal and interest of the bank loan has expired and returned to take a "drag" approach, resulting in the normalization of credit funds bit blocked; the other hand, commercial banks before the end of the debt-equity swap is not unwilling to dare not loans, credit disruption. If this problem is not solved, not only have a negative impact on commercial bank operations, and the entire economy running speed will blocked.

4. If improper operation, debt may become a numbers game.

The debt-equity swap for the state-owned enterprises is undoubtedly a great "feel good". This is because a long time, the debt-ridden state-owned enterprises had to make miserable. If, however, simply by the debt-equity swap "debt reduction" approach, so that the original state-owned enterprises owe the bank's old debts become assets of the company shareholding enterprises, state-owned enterprises thereby reducing the asset-liability ratio, interest expense reduced The increase in earnings, book on digital is attractive, while the system of state-owned enterprises still, debt may become a numbers game, which is obviously contrary to the original intention of the national introduction of a debt-equity swap policy.

(C) of the debt-equity swap work subsequent operation of the lack of regulatory protection.

The whole enterprise to implement a debt-equity swap work an important step for the country to promote the deepening reform of state-owned enterprises, the ultimate aim is to improve the balance sheet position of state-owned enterprises, the establishment of joint-stock enterprises, the establishment of modern enterprise management to adapt to the market economy regime. But the lack of follow-up operation of the regulatory safeguards in the debt-equity swap work. Various types of state-owned assets after the conversion of the enterprise should be how to manage the state-owned asset value preservation work should be assessing, financial asset management company as the second largest shareholder after the state-owned shares how the exercise of shareholders' rights and interests, especially how their operational procedures, improve management system, improve the management level, the lack of effective supervision.

(D) debt-equity swap based on the lack of market mechanisms Beware of asset management companies to become the second of the Agricultural Development Bank.

Implementation of debt-equity swap policy under the conditions of market economy, it must be carried out in accordance with market rules. Financial asset management companies hold shares in the enterprise, but not permanent, but they were staged holdings and financial asset management companies, which requires some corporate shares must be held as much as possible, reliable exit. China's capital market development is not yet perfect, immature, especially state-owned shares in the stock market can not circulate, which makes financial asset management company shares held by corporate repurchase or transfer to intermediaries only exit. But in the case of state-owned enterprises is still in the form of a modern enterprise system stage, financial asset management companies to complete the stage holdings mission, really need to accelerate the improvement of the state-owned enterprise reform, and to establish with them to adapt to the market mechanism. Otherwise, financial asset management companies may evolve into policy institutions, its prospects may be similar to the Agricultural Development Bank, this situation, the debt-equity swap the original intention of the policy, it may become a "castle in the air".

Second, the problem of the debt-equity swap new understanding and recommendations

The original intention of the debt-equity swap is to get rid of the original risk banks and enterprises, but at the same time will also transfer all the risk to the financial asset management companies, if we take into account the debt-equity swap policy implementation process encountered a number of risks and problems, we believe that in the current economic environment, the role of the debt-equity swap is limited, and brought a new understanding.

The relatively unified understanding of the current state-owned enterprises and result in operating losses exacerbated due to high debt and limited repayment capacity of the state-owned enterprises and increase the involvement of state-owned commercial banks credit risk. Imagine if high debt losses, "Uterus" how deeply rooted. We believe that the current losses of state-owned commercial banks in China are many reasons, but the most fundamental reason for the formation of the economic environment and corporate existence of a large number of non-operating assets not standardized, enterprise management and inefficient use of funds , Depletion and other issues. While state-owned commercial bank credit risk problem closely with the state-owned enterprises, but if strict internal control, Social Credit and the legal system, and how so many bad credit assets will form.
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