He looked at me with a half-smile on his face, "Mayor Feng, do you know about the financial products in the bank?"
I was suddenly startled, "I know, I've heard of it. But, what does the bank's financial products have to do with our financing?"
He said: "I didn't pay attention to this problem before. It was only recently when I accidentally looked at some relevant information that I discovered that the financial products in banks are actually local bonds."
I know about local bonds. From the late 1980s to the early 1990s, many local governments issued local bonds in order to raise funds to build roads and bridges. Some were even interest-free to support the country. In the name of construction, it was apportioned to various units, and some even directly used it as part of wages. However, in 1993, this behavior was stopped by the State Council because of doubts about the ability of local governments to fulfill their commitments.
But this year, as investment in local construction has increased, the problem of local debt has become more and more serious. Therefore, the higher authorities have turned a blind eye to the issue of local debt issuance and turned a blind eye. Already.
But I don’t understand: How can this financial product be linked to local bonds?
So I was even more surprised and asked him hurriedly: "Oh? Could you please elaborate on this issue?"
He said: "It was only after I learned about it that I realized that the essence of this so-called financial product is local bonds.
The path to the creation of financial products is as follows: In the first step, local governments take the lead in registering some investment companies. The government calls these investment companies: financing platforms. Their names can be an urban construction and development company, an urban construction asset management company, etc. Chapter 2 The second step is for local governments to establish projects, such as building highways, building airports, building government buildings, etc. The third step is for these companies on the financing platform to go to banks for financing with government projects.
Because it is a government-backed company and a government project, the bank will provide as much financing as the approval amount. The fourth step is of course that the bank knows the situation of the local government. Most of the money will never be returned, which is very risky. .
So the bank sells the creditor's rights to a trust company. For example, for a financing of 1 billion, the bank says I will keep 2% of the interest, and you take over the rest. The contract is for 5% of the interest, and you still have 100%. Three-thirds can be earned. Although the trust company also knows the government's situation, it cannot do without such a big business. What should we do? It's very simple. Just resell it. It will be easier to sell if the interest rate is higher. Anyway, as long as it is sold If you go out, the trust company will have no risk and no responsibility.
Therefore, the trust company turns these claims into project investment products, such as urban construction companies building highway projects, etc., all kinds of which are collectively called "financial management products". The fifth step, the trust company converts these "financial management products" 'Get it to the bank, let the bank sell it as an agent, and get rebates. The sixth step is for the bank to print some advertisements, open a financial management room, assign a financial management manager, look at the deposit amount of the depositors, and call the depositors to promote it. "
After hearing what he said, I immediately understood, "You mean, whoever buys financial products will be the creditor of local government debt. Is that right?"
He nodded and said, "That's right."
I said, "Isn't that a great way? Why do you think I wouldn't agree?"
He looked at me, "Mayor Feng, have you ever thought about it? What if something goes wrong with the project? Who will pay the creditors?"
I was stunned immediately.
He continued: "Once there is a problem with the project, if the creditor goes to the bank, the bank will say this: There is no bank seal anywhere on the signed contract. The bank is just a sales agent. Look at the seal on the contract.
Find a trust company.
The creditors then go to the trust company, and the people from the trust company will say: This is a project of the urban construction company, and we are just a trust company for financial management. It's like if you lose money after buying shares of PetroChina, you can't go to the securities company where you opened an account, right?
?You go to the urban construction company. The creditors will go to the urban construction company, and the urban construction company will say: We signed a financing agreement with the bank, who are you? The creditor will have to go to the bank again, and the bank will say: We are the financing company.
To the urban construction company, what does it have to do with you?
The creditor had no choice but to go back to the urban construction company. The urban construction company said: Whoever sold it to you is the one you go to! The creditor then turned back to the bank, and the bank said: Whoever you signed the contract with is the one you go to! The creditor then went to the trust company.
, the trust company said: Investment is risky, have you not read the terms and conditions of the contract? The creditors will feel that they are justified, so they will say: It clearly says that the capital is guaranteed! The trust company will say: This is a government project, the government does not only say that the capital is guaranteed,
They also said there are subsidies. If you don’t believe me, ask the government! Mayor Feng, if creditors come to ask our government at this time, what would you say?”
I said in astonishment: "How do you say that?"
He smiled bitterly and said: "If it were me, I would say this: We are just setting up and approving projects. We are an administrative agency. Don't you even know this? The creditors had no choice but to say: Forget it, I don't either.
If you find one, just file a lawsuit. But then the creditor will find a problem: when he is preparing to write a complaint, who should he fill in as the defendant? And only then does the creditor discover that to file a lawsuit, he must be at the defendant's location.
The court fights. The bank is local, the trust company is in Shanghai, and the urban construction company is in Beijing. The defendant column cannot be filled in, so there is no way to fight."
I thought about what he said carefully and felt that what he said seemed to be true. However, I immediately felt that this matter seemed a bit unreasonable. Then I asked him: "Mayor Wu,
Have you ever heard of any financial products offered by local governments across the country that were later unable to be redeemed?"
He said: "Such a situation must have happened, that's why I'm telling you this. This is why I'm worried that you won't agree to this method of financing."
I was not satisfied with his answer, so I immediately asked him: "So, what proportion of the failure to honor the money accounted for?"
He was startled for a moment, then shook his head and said: "I haven't done any surveys or statistics on this. But there shouldn't be many. Otherwise, why are financial products selling so well now?"
I nodded and said, "So, I think we can do the same. In the final analysis, it's still the same problem, which is how to control risks. Don't you think so?"
He looked at me in surprise, "Do you really agree to adopt such an approach? The question is, can we guarantee that we can control the risk? Once a risk does arise, both Secretary Rong and you and I will bear a huge burden.
Responsible."
I said disapprovingly: "Why do leaders in other places dare to do this? Aren't they afraid of taking responsibility? I think this is mainly a matter of risk control. As long as we are confident that we can control risks, then there is nothing to fear."
Lao Wu, I think this matter is feasible. First, you should understand the situation clearly. Second, you should ask the bank what the conditions for access are. Third, after understanding these situations, please go to Xiang Rong
The secretary will report. If Secretary Rong thinks we can do that, and the bank agrees with us using this method, I will hold a government executive meeting to study the matter when I come back."
He looked at me suspiciously, "Do you really think it's feasible?"
I smiled bitterly and said to him: "Old Wu, some people criticize me for not being courageous enough. I think you are more indecisive than me. What do we need most now? We need money! As long as we have money, it will be much easier for us to do things in the future.
.
If we want Shangjiang City to be well constructed within a period of time and the economy develops, we must do everything possible to find ways to raise money. Lao Wu, your advantage is that you are good at learning. The method you mentioned today is so good. Since other places
We are all doing this, why don’t we? No matter, let’s do it first and then talk about it. Isn’t reform just about crossing the river by feeling the stones? What are you afraid of? If there is a problem, let’s talk about it. There will always be a way to solve the problem.”
He smiled and said: "Mayor Feng, your criticism is right. Well, I will go and find out more about the situation and report to Secretary Rong immediately. Actually, this is mainly because I have never been engaged in economic work before, so I don't know what to do.
.”
I immediately felt that what I just said was a bit too heavy, and said to him hurriedly: "Old Wu, I am a straightforward person, so don't worry about it. But I mainly think that you are not bold enough, and I will give you many things."
You delegated power, but you did not seize certain tasks because of it.
I don't mean anything else. I'm just thinking, what if you become the top leader of the government one day? It's not possible like you are now. I know that you have been engaged in party affairs in the past and have been more retreatant.
But now you are the executive deputy mayor of the government and the chief executive, which requires you to adapt to the work of the government as soon as possible and transform your retreat into a pragmatic way of working. Haha! Old Wu, we are friends. In this case, I just
Speak in front of friends. I hope you can understand my painstaking efforts."
He said to me sincerely: "Mayor Feng, don't say that. I know completely in my heart that you must have said these words to me directly for my own good. I know you and you are a human being.
Tolerant, rarely criticizing others, if it weren't for us being friends, you wouldn't be able to say such things to me in person.
In fact, I am very clear about my own shortcomings. I am too cautious in handling things, which is both an advantage and a disadvantage. If I was engaged in party affairs and united front work before, it would be fine, but now it seems that there is indeed a problem.
Also, I am a little too dependent on you, so I am not so proactive and bold when dealing with many things. Haha! Mayor Feng, don’t worry, I will try my best to correct this problem of mine in the future. However, I still have some major problems.
Do I have to report to you first?”
I smiled and said, "What report? Let's discuss it together."
After our conversation, he has indeed become much more proactive in his work. In fact, he also understands that this is me further delegating power to him. He is a local, and if he is more bold in his work, I will
The pressure will be reduced a lot, and it will also give him more prestige among the cadres and people below. What he knows better is that I am not the kind of person who takes power very seriously, but I take work very seriously.
.
In fact, this should be the case between friends. If something happens, just explain it clearly and thoroughly. Being secretive can only make the problem more complicated and make things worse. (To be continued)