At the Signing Ceremony of Three Banking Sector Codes
Fellow representatives,
Ladies and Gentlemen,
Good afternoon. I am very pleased to attend today s signing ceremony of the three codes, i.e. Service Provision Code, Rights Protection Code and Self Discipline Code. At a time when banking sector reform has made important progress and the 5th Plenum of 16th CPC Central Committee adopted the 11th Five-Year Program, safeguarding social and financial order is of great significance. I would like to extend, on behalf of the People s Bank of China, warm congratulations on the adoption of three Codes.
Maintaining a good order in the banking sector and the smooth functioning of financial market serves as the basis for a stable and rapid economic growth and social stability and an important factor in achieving sustainable development. Both individual banks and the banking sector need to work together to achieve a good order in the sector and the smooth functioning of financial market. I have three points to make on this matter.
I. A number of forces are needed to preserve social and financial order.
Four forces, i.e. government supervision, legal person constraint, public oversight and sector self-discipline, are indispensable in the preservation of social and financial order.
For a long time, government supervision, as the major force in financial sector management, played a dominant role in regulating the operation and management of banks. As a market economic system was further refined and globalization of market progressed, financial supervision has, in reference to the operational targets of financial institutions, included internal management by financial institutions and public oversight in it scope.
The establishment of a mechanism for legal person constraint as well as enhanced public attention to financial reform and financial services has greatly strengthened market constraint over banking sector and self-discipline. An internal control system centering on capital adequacy ratio has been increasingly improved.
Public oversight has become an important force in bank regulation.
Yet, self-discipline by the sector is indispensable to a soundly functioning financial system. According to international financial supervision experience, sector s self-discipline is an important force. We did not pay proper attention to sector association s role. Against the background of domestic financial sector globalization and heated competition in banking industry, it is of practical significance to stress banking sector association s role in sector self discipline.
II. Give full play to the function of sector association
The maturing of market economic system is that sector associations can fully perform their functions. As a socialist market economic system is established and the government redefines its roles, sector associations are playing a more prominent role. Since its inception in 2000, with the support of People s Bank of China, China Banking Regulatory Commission and Ministry of Civil Affairs, the China Banks Association has played an important role in helping the supervisory authority to carry out its work, coordinating the relationship among member banks, promoting sector self-discipline and safeguarding rights and interests of the sector. When the WTO transition period is coming to a close and the 11th Fifth-Year Program about to be launched, Banking Association s roles should be stressed. At the moment, I think the Association should work on the following priorities:
1. Actively explore new approaches and mechanism in line with the requirements of banking reform and development. Local associations should focus on functions such as self-discipline, rights protection, coordination and services and expand areas of service provision. No efforts should be spared to meet members need in the interest of the people.
The second is innovation in coordinating mechanism. Gradually, a coordinating mechanism should be established with a clear definition of functions, a good balance of rights and obligations and smooth interactions in the principle of harmony, efficiency and practicality. The third is innovation in methods and ways of work.
Adoption of codes is a good innovation in itself. Local banking associations should attach importance to formulation and adoption of sector codes and standard, which will serve as the basis for coordination and guidance and the improvement of association s work.
2. Be a good communicator and coordinator. Banks Association should strengthen communication with the supervisor to facilitate their work for effective supervision. The unique role of market coordinator should be fully utilized in collecting and forwarding to the supervisory authority comments and suggestions from member banks to provide a basis for supervisory decisions and ensure efficient communication between supervisory authorities and member banks.
Secondly, the Association needs to have close contacts with members and promote communication and cooperation among them. Thirdly, the Association can help members communicate with the general public, handle complaint from the latter, and win understanding and support for the sector as a while. Fourthly, the Association should cooperate more with legislative and judicial authorities, actively participate in works related to legislative procedure, assist in the public awareness campaign for relevant laws and regulations, and provide feedback on relevant legislative issues.
Fifthly, works should be done to improve information exchange and provide consulting services.
3. The Association should focus on the formulation of sector wide standards and business operation regulations, facilitate and monitor their implementation in order to promote sector s development. In order to safeguard the legitimate rights and interests of the sector, the Association should actively engage in supervisory authorities efforts of policy formulation, regulations and standards and speak on behalf of the sector in this regard.
I suggest that the Banks Association consider working in three steps, i.e. a survey of the sector-wide implementation of professional standard, a study of internationally accepted standards, followed by a gradual and sequenced procedure of formulating business operation standards and professional codes in line with Chinese reality and moving towards convergence with international practice.
4. Strengthen training and organize professional qualification exams and relevant trainings to improve staff quality in the sector. The Association and its members should strengthen cooperation in establishing a system of professional qualification certification system and professional training. This is already reflected in the Service Provision Code and Self Discipline Code. Therefore, in accordance with the Codes, the Banks Association can help the relevant agencies to conduct training and qualification exams following a single standard and in a uniform pattern.
In general, the Association should adopt a scientific approach towards development, perform its various functions in real earnest as a policy advisor, an information provider, a market coordinator, an arbitrator, a service provider and an organizer of sector-specific activities.
III. Sector self-discipline and rights protection should be realized in light of the significance of the three codes.
The adoption of the three codes, as an important measure taken by the China Banks Association, will serve as a basis for its functions in facilitating self-discipline, assisting rights protection, coordinating and servicing. The codes also provide an effective way and institutional guarantee for protecting members rights, and improving financial services.
Every member should have such awareness. At the same time, to make signed codes meaningful, persistent implementation matters. Today s signing must be matched by concrete deeds of implementation and compliance. What you have promised today by adopting the codes should be delivered through your daily work.
The China Banks Association can put in place an investigation mechanism and a complaint handling mechanism to monitor and promote implementation of the codes.
As the socialist market economic system is being improved, the People s Bank of China will face more challenges in macro-adjustment and regulation. We will, in accordance with the Law of the People s Republic of China on the People s Bank of China, adjust and regulate financial activities on a market basis and at a macro level, formulate and conduct monetary policy, monitor inter-bank market and inter-bank bond market, foreign exchange market and the gold market, prevent and dissolve systemic financial risks and preserve national financial stability; we will also plan and organize anti-money laundering work in the financial sector and regulate credit registration industry.
All of these have a bearing on the development of banking sector and the functioning of financial market. We will work together with the China Banking Regulatory Commission to support the implementation of the three Codes in the principle of focusing both on regulation and service for a prosperous and stable financial sector.
Thank you.
