Starting from 1999, four asset management companies, including Cinda and Huarong, were ordered to deal with trillions of non-performing assets of four major commercial banks. Ten years later, these "bad banks" used the market springboard to hand over more bills to the state. The consequence of this tossing is that bad debts are increasing instead of decreasing, and all taxpayers are paying the bill. In order to understand the nature of the condominium accounts set up by Huarong Asset Management Company following the "Cinda Model" this time, we must know the past lives of these four asset management companies in China. On 1999 during the Asian financial turmoil, the Central Financial Work Conference decided to decisively divest the huge bad debts of the four major banks of industry, agriculture, China and construction10.4 trillion, and set up four asset management companies (AMC) corresponding to Huarong, Great Wall, Dongfang and Cinda in exchange for light reforms in the financial industry and the overall economy. As the sole shareholder, the Ministry of Finance injected 654.38+billion yuan into each company, and guaranteed four AMCs to obtain 604.65438+billion yuan of refinancing from the central bank, and then issued financial bonds with a total amount of 865.438+065.438+0 billion yuan to the four major state-owned banks and China Development Bank for purchase at the consideration of 1: 1 They live on the "rotten meat" and clean up the garbage for the whole economy. The goal of these financial vultures in China is to "maximize the preservation of assets and reduce losses" during their ten-year existence. The governor of the central bank once said that the first divestiture of 1.4 trillion non-performing assets "50% was caused by administrative intervention of governments at all levels, 30% was to support state-owned enterprises, and the remaining 20% was caused by banks' own operations. "Simply put, the establishment of AMC obliterated the transformation of China's financial industry into a market economy, and it was the existence of these four" bad banks "that made the four major state-owned banks" good banks ". At the end of 2006, official public data showed that AMC had disposed of non-performing assets 1.2 1 trillion, accounting for 83.5% of the total acceptance, and recovered about 2 1. 1 billion yuan in cash, with a recovery rate of about 20%. There are different opinions about the achievements of asset management in the past ten years. Although dealing with non-performing assets is a highly technical job, and although the achievements of the four major state-owned banks, Industrial and Commercial Bank of China and China Construction Bank, rank among the top two in the global banking industry, which shows the correctness of the original decision of "laying down the burden" and "exchanging time for space", about 20% of the cash recovery data still shows that AMC has worked hard for more than ten years, and there are still more than 654.38 trillion non-performing assets in the banking system, which have only been transferred from commercial banks to AMC's pockets. Considering the cost behind the 20% recovery rate, when AMC was established, it seconded personnel from state-owned banks, and the cost rate of recovering cash was 8.65%. After AMC disposed of relatively high-quality non-performing assets in the early stage, the recovery rate decreased year by year, but the management cost increased year by year. AMC management once disclosed: "If you recycle 100 yuan, you can only get 1 yuan as a reward, and you may get a rebate from 20 yuan as the cost of manufacturing 100 yuan. Which one do you choose? "Even out of concern about the uncertain future after the end of the 10 year duration, some AMCs keep non-performing assets to earn money from other businesses, so as not to have empty pockets. In the process of AMC operation, the debate about the loss of state-owned assets has been very common. First of all, the time pressure of "the deadline is coming" forced AMC to carry out "big sale" in order to achieve the goal of clearing inventory quickly in the later period. The insiders who participated in the auction of AMC asset package said that if the non-performing assets formed by the economic cycle must be disposed of before the end of 2006 under the administrative instruction, the pit will definitely lead to "bargain sale". He also revealed that AMC is more willing to sell to the government in order to prevent moral hazard when dealing with private people, and the price is naturally very low. The most extreme example occurred in 2006, when the Shenyang office of Great Wall Asset Management Company transferred 65.438+86.7 billion state-owned financial non-performing assets at a low price, accounting for less than 654.38+0% of the creditor's rights. The buyer only relied on one of the creditor's rights (about 0.4% of the total amount of 65,438+), which not only recovered the investment of/kloc-0.8 million yuan, but also earned another 8 million yuan. Some people in the industry even denounced it as "selling sweet leaves without feeling distressed". In fact, AMC has mastered all the cost and income information of the disposal of non-performing assets and the right to discount assets, but there is no hard target for the recovery rate, and the operating losses are borne by the state, which has formed a "rent-seeking" space. At the beginning of 2005, the National Audit Office disclosed that four financial asset management companies (AMC) had been found to have various irregularities and irregular management problems, with funds exceeding 70 billion yuan, and 38 cases involving funds of 6.7 billion yuan were found. Li Jinhua, then director of the Audit Commission, pointed out in his briefing that some AMCs were lax in financial management, and there were cases of falsely reporting fraudulent claims and misappropriating recovered funds, and even used such means as falsely reporting, withholding income and falsely listing expenses to distribute high salaries and bonus subsidies. Regulators also noticed that the maximization of recovered assets and the minimization of disposal costs did not seem to be placed in the most important position of AMC's daily business. AMC has the right to dispose of debts of tens of thousands of enterprises, and has set up branches involving leasing, securities brokerage, real estate and trust business. Huarong official website has shown that it owns the equity of 300 enterprises and 10 financial platform companies, and its profit in 2009 increased by 102.9% year-on-year. However, all business information of AMC, including the most important rate of capital recovery, is not disclosed regularly. Karl, the author of Red Capitalism? Walter bluntly said that the capital flow between the government and these asset management companies was still not completely transparent from the moment when non-performing loans were stripped off the bank balance sheet. Summarizing the "bad banks" in the past decade, the obvious feature is that the disposal of trillions of non-performing assets of state-owned banks has not achieved much, and the bad debts have just moved but the money has not been liquidated. What's more, AMC itself has constantly generated new debts in its ten-year operation. According to statistics, including four AMCs divested their non-performing assets again in the early days of its establishment and in 2005, the central bank provided AMC with refinancing as high as 1.2 trillion; The bonds of RMB 865,438+065,438+0 billion issued by AMC to four banks cannot be repaid after 65,438+00 years. That is to say, after deducting various expenses, most of the cash recovered from the four AMC policy businesses is used to pay the interest of the central bank's refinancing and financial bonds, and the rest can repay the principal very little. Taking Huarong Company as an example, according to the data of China Banking Regulatory Commission, by the end of 2005, Huarong Company had recovered a total of 54.39 billion yuan in cash, while during the same period, Huarong Company paid the accumulated interest payable on all financial bonds to ICBC, and paid the re-loan interest to the People's Bank of China of 4.578 billion yuan, with an accumulated cost of 28,965.438 billion yuan, totaling 4.63 billion yuan. Old accounts have not been dealt with, and more than one trillion policy business losses are hanging on AMC's account. This is the embarrassing reality faced by "bad banks" ten years later. However, when choosing AMC to choose the follow-up reform path, the superiority of the government of public institutions is once again reflected. In 2009, China Construction Bank announced that it would hold 247 billion bonds of Cinda Asset Management Company for ten years. Subsequently, China Banking extended the bonds for 65,438+00 years, and the interest rate remained unchanged at 2.25% per year. The Ministry of Finance continued to provide guarantees for the bonds. In addition, AMC's 573.9 billion refinancing loan owed to the central bank was suspended. Under normal circumstances, in order to ensure the balance of assets and liabilities, the central bank should pay the corresponding paper money for each additional creditor's right. Every time you pay back a sum of money, you have to cancel a base currency. Hanging on the account means that the AMC on the left does not have to repay the loan, and the AMC on the right does not reduce the money. If liquidity stays in the market, it may lead to inflation in the whole society. Similar to the above policy, the implementation of "full management" for specific asset management companies will generate a "co-management account" when Cinda transforms into a market-oriented one. In 20 10, the State Council approved Cinda to set up a "condominium account" in the Ministry of Finance, and stripped the huge losses of more than 200 billion yuan in history into this account for a period of 10. In essence, the "condominium account" is to repay the current debt with future income. The practice is to replace the stripped non-performing assets with high-quality assets, and the Ministry of Finance issues an equal amount of interest-bearing bonds to Cinda as the expected dividends and income tax relief for Cinda's sole shareholder in the future. After the introduction of the "co-management account" scheme, the Ministry of Finance, as the creditor of non-performing assets, does not need to pay cash immediately to resolve the losses, but Cinda's financial statements will become clean or even "healthy", and finally the new accounts and old accounts will be left to the future. The article in 20 10 of Securities Market Weekly pointed out that since AMC received non-performing assets, the so-called "policy acquisition" has been a digital game. More than a decade later, AMC owed about 1 trillion to the central bank and signed 820 billion yuan from the four major state-owned banks. Only 20% of the original10.4 trillion non-performing assets were recovered in cash. Whether these arrears are entered into a "co-managed account" or the issuance of bonds is postponed or suspended, they are only "left pockets for right pockets" under different subjects of the national balance sheet. However, debt is debt, corporate write-off depends on profits, fiscal write-off depends on taxes, and central bank write-off depends on inflation. These bad debts are hidden in China's GDP benefit, and really become a bubble in China's economy. If the remaining bad debts are stripped only by the "co-management account", if Great Wall and Dongfang follow the way of Cinda and Huarong, there will still be nearly one trillion non-performing assets that will not be disposed of in the next decade, and the final result will be shared by all the people in the country, which will cost nearly 1 000 yuan. According to Chen, deputy director of the Financial Research Center of Southwestern University of Finance and Economics, including the cost of the shareholding system reform of the Agricultural Bank of China, the cost of China's gradual financial reform has accumulated to 3.2 trillion yuan. If it is written off, 10% of China's GDP in 2009 will be gone. Every capital operation, there must be a group to pay the price. The central bank and the Ministry of Finance are not profit-making enterprises, but implicit statements that taxpayers bear the costs. Analyzing the concrete methods of the central finance to save the bad debts of banks can also prove how to pay for the bad debts. When bad debts accumulate to a certain extent, banks can only pay directly if they write off bad debts with their own profits. If the state uses foreign exchange reserves to inject capital into banks, it is equivalent to directly injecting more base money into the market, diluting the welfare of all RMB users in the form of hidden inflation, and searching for nationals in the form of seigniorage to fill the bottomless pit of banks. In addition, the financial bonds issued by AMC to the four major banks are guaranteed by the central government. Although this kind of invisible guarantee is not a direct one-time payment, it is an indirect payment in the end, and the central government will postpone the payment. Although the central bank's refinancing has stopped at present, it will eventually lead to rising prices through inflation in the circulation field, and the people will have to pay the bill. Generally speaking, the initial non-performing assets of banks have not decreased after being disposed of by AMC. Now, through market-oriented reforms, they have been stuffed back into the financial system. Bad debts are being enlarged and worsened while being transferred and deferred, and finally all taxpayers can only take over.

Second, what happened after the bad debts of state-owned banks were stripped to the four major state-owned asset management companies?

In fact, it is to let the four major state-owned banks have better statements, which is conducive to obtaining higher market value when listing.

3. Why do commercial banks expand the scope of state-owned assets after restructuring?

At present, commercial banks are all joint-stock systems. Starting from this year, we will gradually and comprehensively reform the wholly state-owned commercial banks in accordance with the requirements of establishing a modern enterprise system. "A sound financial system that meets the requirements of the socialist market economy is a sound financial system of financial institutions, and its main body should be diversified. However, the four wholly state-owned commercial banks have always occupied about 70% of the market share, and their stable monopoly position in the domestic banking industry is emerging, making it more difficult to compete fairly with them on a large scale. The resulting irregular or even vicious competition expands market share, which not only causes huge waste of financial resources, but also accumulates insufficient self-owned capital for sustained, stable and healthy economic development. The capital adequacy ratio of commercial banks should not be less than 4%. The wholly state-owned commercial banks in China generally fail to meet this standard. Judging from the situation of international big banks, in 2000, the average capital adequacy ratio of the top 20 banks in the world (excluding banks in China) was 1 1.52%. Compared with international big banks, the capital adequacy ratio of state-owned commercial banks in China was still less than 8%, which enhanced their risk and expansion ability. Judging from the NPL ratio, the global average NPL ratio is only 3.27%, among which the NPL ratios of Citibank and Bank of America are 1.4% and 0.85% respectively. The capital shortage of bad commercial banks has seriously weakened the ability of banks to absorb loan losses, and the security of the whole financial system has increased the problem of unclear property rights of wholly-owned commercial banks that undertake too many policy businesses. Under the traditional economic system, a single form of state-owned property rights has the inherent institutional characteristics of the integration of government and enterprises. Under the original system, wholly state-owned commercial banks undertook too much policy business, which led to a large number of opening to the outside world. Prior to this, the most important financing channel for state-owned enterprises was finance. But with the deepening of system reform, the development of state-owned enterprises has become the historical responsibility of state-owned banks. After 1980s, state-owned commercial banks replaced finance as national statistics. Since the reform, more than 80% of state-owned loans have flowed to state-owned enterprises. At the end of 1996, state-owned enterprises occupied 743.47 billion yuan. Without the financial support of banks, the growth of state-owned enterprises is impossible, but the support has made state-owned banks pay a heavy price. The four major asset management companies established in 1999 received 1.3 trillion bad debts generated by state-owned banks before 1995. According to official estimates, this will only reduce the bad debt rate of state-owned banks to below 20%. The establishment of property right relationship and modern financial company governance structure can make China Bank. Only divestiture can enliven wholly state-owned commercial banks. 4. Choosing O to deal with WTO means that China's economy will be fully integrated into the tide of economic globalization, and China enterprises will face all-round competition, especially the challenges faced by financial enterprises will be more intense. At present, facing the challenge of foreign banks, China's wholly state-owned commercial banks are facing serious drawbacks. First of all, the basic principles of the system and mechanism are fair competition, reduction and elimination of barriers and protection. If the four wholly state-owned commercial banks still don't distinguish between government and enterprises and have a strong government color, they will not only be regarded as violating WTO principles, but also be difficult to win in the competition. Secondly, the strength is insufficient. Most foreign banks that can expand in the world are large banks with large scale, strong strength, sufficient capital, rich international business experience and excellent performance. China's wholly state-owned commercial banks have a single business variety, and the motivation and ability of financial innovation are low. According to the existing system of the four wholly state-owned commercial banks, it is difficult to fundamentally solve these problems, and it is necessary to carry out joint-stock reform. This conforms to the development direction of modern financial enterprises.

How to deal with bad debts of banks in the 1990s?

1. Write off by level.

2. Establish an asset disposal company.

3. Debt-to-equity swap.

In the 1990s, with the deepening of reform, there were more and more non-performing assets in the system, and it took a lot of manpower and material resources to deal with the collection. The Ministry of Finance allocated 40 billion yuan to set up four asset management companies (state-owned AMC), namely Dongfang, Huarong, Cinda and Great Wall, to divest off-balance-sheet bad debts of commercial banks. Commonly known as "package transfer", that is, the bad debts originally belonging to the bank are transferred to AMC through the transfer of creditor's rights.

The loss of the bank's principal is basically inevitable (the packaged transfer of creditor's rights is basically sold at a discount on the basis of the principal), which will consume the bank's provisions, commonly known as "provision for bad debts".