The People's Bank of China website reported on June 27 that recently, Yi Gang, Governor of the People's Bank of China, accepted an exclusive interview with a reporter from China International Television (CGTN) on issues such as financial support for green transformation, green information disclosure, international cooperation in green finance, and monetary policy.In an exclusive interview, Yi Gang made it clear that monetary policy will continue to focus on the total amount to support economic recovery, and at the same time make good use of structural monetary policy tools such as supporting small and medium-sized enterprises and green transformation.
On monetary policy:
Continue to work from the total
Regarding the current orientation of monetary policy and what role it will play in supporting the national economic recovery, Yi Gang said that since the beginning of this year, affected by the epidemic and external shocks, China's economy has faced certain downward pressure.Monetary policy will continue to exert efforts in aggregate to support economic recovery.At the same time, structural monetary policy tools such as support for SMEs and green transformation should also be well used.
Yi Gang believes that China's monetary policy has always been in line with supporting the development of the real economy.The growth rate of broad money M2 and social financing basically matches the growth rate of nominal GDP, maintain a reasonable and sufficient liquidity, and support the development of small and medium-sized enterprises to achieve the goal of maximizing employment.
As far as interest rates are concerned, Yi Gang believes that in the past 10 years, China's market interest rates have been stable with some declines.The level of natural interest rate is mainly determined by the marginal product rate of capital and the long-term development trend of population.China's interest rate formation mechanism is determined by market supply and demand, and the central bank guides market interest rates through the use of monetary policy tools.At present, the interest rate of time deposits is 1%-2%, and the interest rate of bank loans is 4%-5%, while the bond and stock markets are operating relatively efficiently.Taking into account the level of inflation, it can be seen that the real interest rate level is quite low, and the financial market can allocate resources efficiently.
In terms of inflation, Yi Gang said that China's inflation outlook is relatively stable, with CPI up 2.1% year-on-year and PPI up 6.4% year-on-year."Maintaining price stability and maximizing employment are our priorities," he said.
Talk about green transformation:
Promote through structural monetary policy
In terms of green transformation, Yi Gang believes that the central bank can play an important and active role in green transformation, and the international community has reached a consensus on this.As far as monetary policy is concerned, the first and foremost responsibility of the central bank is to maintain price stability.However, some central banks still have policy space to promote green transition through structural monetary policy.
"In order to promote green transformation, the People's Bank of China has done a lot of work." Yi Gang introduced that the People's Bank of China included high-quality green bonds and loans as eligible collateral for the Medium-Term Lending Facility in 2018, and last year launched carbon emission reduction support tools and Two new monetary policy tools to support the clean and efficient use of coal, special re-lending, both with an interest rate of 1.75%, support eligible financial institutions to provide low-cost financing for projects with significant carbon emission reduction effects.
In addition, as of the end of May this year, the People's Bank of China has issued a total of more than 210 billion yuan to relevant financial institutions through two tools, reducing carbon emissions by more than 60 million tons of carbon dioxide equivalent, accounting for about 0.6% of China's annual carbon emissions; last May , the People's Bank of China revised and issued the "Green Finance Evaluation Plan for Banking Financial Institutions", including the issuance of green loans and green bonds by financial institutions into the central bank's financial institution rating, in order to encourage financial institutions to provide support for green transformation.
"As of March this year, the balance of China's green loans has exceeded 18 trillion yuan, growing rapidly. The balance of green bonds in China is about 1.3 trillion yuan, ranking among the top in the world." Yi Gang said.
Talking about green information disclosure:
key to promoting green transition
"Information disclosure is very important and is the key to promoting green transformation." Yi Gang believes that in order to implement green monetary policy tools fairly and efficiently, attention should be paid to preventing "greenwashing", low-cost capital arbitrage, green project fraud, etc. in practice. Moral hazard issue.Therefore, in the entire process of designing and implementing monetary policy tools to support green transition, information disclosure and transparency and strict supervision must be put in place.
For example, Yi Gang said that the carbon emission reduction support tool requires financial institutions to publicly disclose information such as the amount of carbon emission reduction loans, interest rates, the number of supported projects, and the amount of carbon emission reduction driven by the loans on a quarterly basis. It is also very important that an independent third-party professional organization verifies the disclosed information, and the public is aware of it and supervises it.
"In order to promote the management of climate risks, the People's Bank of China conducted the first climate risk stress test last year. Judging from the test results, insufficient disclosure of carbon emission information is still the biggest challenge currently facing." Yi Gang said that in order to promote climate information disclosure, the People's Bank of China Last year, the "Guidelines for Environmental Information Disclosure by Financial Institutions" was issued, which put forward requirements on the form, frequency, and qualitative and quantitative information to be disclosed by financial institutions. Including the identification, assessment, management and control process of environmental risks.Information such as the issuance of carbon emission reduction loans and the scale of carbon emission reductions that have been verified and verified by third-party professional institutions will be extended to the whole country in due course in the future.
Talk about international cooperation in green finance:
Continue to promote through multilateral and bilateral platforms
Yi Gang said that in the international field, the People's Bank of China has worked with all parties to actively guide market funds to support climate change response.The first is to jointly lead the G20 Sustainable Finance Working Group; the second is to promote the convergence of green finance classification standards with the European side and achieve phased results; the third is to build a green “Belt and Road” with green finance.
In addition, Yi Gang said that the People's Bank of China has also carried out exchanges and cooperation with the central bank and regulators, the Green Finance Network (NGFS), the Financial Stability Board (FSB), and the Basel Committee on Banking Supervision (BCBS), to promote the improvement of green finance regulatory standards. .In the next step, the People's Bank of China will continue to promote international cooperation in green finance through multilateral and bilateral platforms, so as to better serve my country to achieve carbon peaking and carbon neutrality goals.
