According to the 21st Century Economics website, China's National Inter-bank Funding Center has issued a detailed implementing ruling for disposing of defaulted obligations through repurchase approved by the PBOC on 17 June 2019. The ruling applies when a repurchasing-purchaser triggers an event of default in a...

由北京市人民政府主办的“2019金融街论坛年会”于5月29日-30日在北京举行。主题为:深化金融供给侧结构性改革,推动经济高质量发展。 中国人民银行行长易纲表示,继5月15号人民银行对千余家县域金融机构降低存款准备金率后,6月17日和7月15号将进行第二、第三次定向降准,总计将释放3000亿资金。中国证券业协会副会长孟宥慈表示证券法修订案的第三稿已经正式公开征求意见,有望为资本市场和证券行业的高质量发展进一步提供法律和制度的保障。   The main theme of the Annual Conference of Financial Street Forum 2019 (Beijing, May 29-30) was Deepening Financial Supply-side Structural Reform and Promoting High-quality Economic Development. People's Bank of China (PBOC) president Yi Gang [https://en.wikipedia.org/wiki/Yi_Gang] announced a total stimulus of 300 BN Yuan. On May 15,...

Can securitization work in China? Securitization was invented in the 1970s to resolve a U.S. systemic financial crisis. It can work anywhere, provided that (i) the legal system supports the market’s custom and practice; and (ii) the system of risk measures reflects true security risk and value. Twenty years ago, securitization could not work in China. The law did not expressly allow asset purchases and sales. But in the last two decades, China’s central government has shown considerable will to foster securitization.

Two days ago, Business Insider published a good summary of little known facts about Alibaba. Several facts highlight how the mega trade-web dwarfs competitor e-commerce platforms in the U.S. and in China on several critical measures, including employees, registered users, web visits, sales throughput (on track...

For 11 years between 1976 and 1998, I worked in Chinese-speaking Asia. Many of my deeper insights into the dark side of human nature came from my experiences there. Not because Chinese society (in its many forms) is darker than American society, but because the darkness is in plain view. It is not a taboo. Chinese matter-of-factness also makes some conversations easier. In the most awkward of moments one can always agree that things are indeed 很复杂, very complicated, and gloss over the unspeakable. One need not parse exactly who or what is complicated. Last Thursday morning (2012 1206) I was asked to talk to senior-level officials from the PRC Ministry of Industry and Information (MIIT) about whether our post-Crisis financial reforms can power up the real economy. With responsibility for regulating and developing telecommunications and the digital economy and promoting the national knowledge economy, these delegates came with a fairly well-developed point of view about the efficacy of our reforms (negative). They came to hear the thinking of U.S. academics. Nominally I am an academic, an Adjunct Associate Professor of Finance at Hong Kong University of Science and Technology. But that is not why I was on their agenda. In the '80s and '90s, I worked with Chinese economic reformists; knowledge of the long and winding road to marketizing the Chinese economy gives my presentations a certain caché. Here were my thoughts:
  1. The main point of our reforms is a renewed focus on financial system design. It may work out all right but in the short run, most measures are weak.
  2. A solid debt capital market architecture has three interlocked cornerstones:
    1. Well-articulated market infrastructure, where information parallels the flow of capital
    2. A consensus theory of value that allows people to debate risk and value with the same set of meanings without stifling independent thought
    3. A public, unified, consistent set of benchmarks on which to convert valuation to wholesale quality grades, also known as a credit rating scale.
  3. Our fractured financial regulatory systems--the de jure ones to be sure but also the de facto system that keeps credit ratings separate from pricing, and from benchmarks of intrinsic cash value separate--gave rise to the Credit Crisis.

Last night, I was hosted by Andrew Chi Fai Chan, Director of the EMBA program at Chinese University of Hong Kong (CUHK) and civic leader, at the downtown campus, where I had the privilege of speaking to a mix of current students and alumni about...