Understanding Finance from scratch

Chapter 7 No one speaks Chinese these days, everyone speaks CPI——Learn some financial terms every day (3)
When it comes to national debt, you may be more familiar with it. It is a hot spot for personal investment in recent years, with stable and safe income.In fact, national debt appeared very early in our country.In the late Warring States Period, King Nan of Zhou listened to King Xiaolie of Chu, and in the name of the Son of Heaven summoned the six countries to send troops to attack Qin. He asked the Duke of Western Zhou to gather 6000 soldiers. Since he had no military expenses, he had to borrow money from rich merchants and landlords, but the six countries did not listen to him at all. , The money he borrowed was quickly spent, and the creditors came to collect the debt one after another, so he had to hide on a high platform in the palace.This is also the origin of the idiom's high debt.It seems that national credit must be supported by strong strength.

There are roughly four types of treasury bonds that we buy and sell:
Voucher-style treasury bonds are a kind of national savings bonds, which can be registered and reported for loss. The creditor's rights are recorded with "voucher-style treasury bond collection certificates". They cannot be listed and circulated, and interest will be calculated from the date of purchase.During the holding period, if the holder needs to withdraw cash under special circumstances, he can redeem it in advance at the purchase outlet.When withdrawing in advance, in addition to repaying the principal, the interest is calculated based on the actual number of days of holding and the corresponding interest rate level, and the handling agency charges a handling fee of 2‰ of the principal.

Bearer (real) national bonds are a kind of physical bonds, which record claims in the form of physical bonds, with different face values, bearer, no loss report, and can be listed and circulated.During the issuance period, investors can purchase directly at the counters of government bond sales agencies.Investors who set up an account in the stock exchange can entrust a securities company to apply for purchase through the trading system.After the issuance period ends, holders of physical bonds can sell them over the counter, or hand over the physical bonds to the stock exchange for custody, and then sell them through the trading system.Currently discontinued.

Savings treasury bonds (also known as electronic treasury bonds) are non-negotiable registered treasury bonds issued by the government to individual investors for the purpose of absorbing personal savings funds and meeting long-term savings investment needs.Electronic savings treasury bonds are savings treasury bonds that record claims electronically.

Book-entry treasury bonds record creditor's rights in the form of book-entry, are issued and traded through the trading system of the stock exchange, and can be registered and reported for loss.Investors who conduct book-entry securities trading must open an account in the stock exchange.Since the issuance and transaction of book-entry treasury bonds are paperless, the efficiency is high, the cost is low, and the transaction is safe.

Non-Performing Loans: The Achilles Heel of the Banking Industry
The China Banking Regulatory Commission reported that in the second quarter of 2010, the non-performing loans of my country's commercial banks maintained a "double reduction", and the provision coverage ratio further increased.As of the end of the second quarter of 2010, the balance of non-performing loans of domestic commercial banks (including large commercial banks, joint-stock commercial banks, city commercial banks, rural commercial banks and foreign-funded banks) was 4549.1 billion yuan, a decrease of 425.2 billion yuan from the beginning of the year; the non-performing loan ratio was 1.30 million yuan. %, a decrease of 0.28 percentage points from the beginning of the year.The provision coverage ratio of commercial banks reached 186.0%, an increase of 31.0 percentage points from the beginning of the year.

而银监会2009年年报数据也显示，我国主要商业银行的不良贷款率从2003年的17.9%下降至2009年年底的1.6%，不良贷款余额从2.1万亿元下降到了0.4万亿元，而拨备覆盖率则从19.7%上升到了155.4%。

Non-performing loans have always been a big problem plaguing banks. So, what are non-performing loans?How to solve the problem of non-performing loans?
Non-performing loans will directly affect the development of banking business. It will not only erode the bank's profits or capital, but also lead to bank bankruptcy in severe cases.

In order to prevent loan bad debts and improve loan quality, banks need to carefully and scientifically manage the loans that have been issued, and closely monitor the risks of loans, so they must classify loans scientifically.Since 1998, my country has implemented a five-category loan classification method, paying more attention to the repayment ability of the borrower, rather than simply looking at whether the loan is overdue like the previous four-category classification, which is more scientific and more conducive to bank control. Loan Risk.

The five-category loan classification is also a relatively scientific loan classification method currently accepted internationally. Starting from the possibility of repayment of each loan, the loan is divided into five grades to evaluate the quality and true value of the loan.The five-category loan classification criteria include:
Normal loan: The borrower has been able to repay the principal and interest normally. The bank is fully sure that the borrower will eventually repay the loan. All aspects are normal. There are no factors affecting the timely and full repayment of the principal and interest of the loan. There is no reason to doubt that the loan will suffer loss.

Pay attention to the loan: the borrower has no problem repaying the principal and interest of the loan, but if the potential problem develops, it will affect the repayment of the loan.

Subprime loan: The defects of the loan are already obvious, and the normal operating income is no longer enough to guarantee the repayment, and the repayment needs to be repaid by selling, liquidating assets, external financing, or even implementing mortgage guarantees.

Doubtful loan: It is certain that the loan will suffer a certain loss, but the amount of the loss cannot be determined because of factors such as the borrower's reorganization, merger, consolidation, collateral disposal, and pending litigation.

Lost loans: All or most of the loans are irrecoverable, and even if bankruptcy liquidation or mortgage guarantees are executed, all or most of the loans will still be lost.

The five-category classification can only prevent the occurrence of non-performing loans. If non-performing loans already exist, how to deal with them?Generally, there are two methods: one method is "internal resolution", and the other method is "extracorporeal blood transfusion".

"Internal resolution", commercial banks can use loan loss reserves and their own accumulated surplus to write off bad debts, or use debt auctions and other methods to dispose of non-performing loans. The key to "dissolving" non-performing loans in the body is to increase the profitability of banks while strictly controlling the growth of non-performing loans, and gradually digest and reduce non-performing loans.

"In vitro blood transfusion" all rely on external forces to resolve non-performing loans. "In vitro blood transfusion" refers to the removal of non-performing loans from the books of commercial banks and handing them over to professional asset management companies for centralized disposal. In 1999, my country established four financial asset management companies, Cinda, Huarong, Great Wall, and Dongfang, which stripped 1.39 trillion yuan of non-performing loans from the four major state-owned commercial banks based on book value. "In vitro blood transfusion" refers to injecting funds into commercial banks from the outside to resolve non-performing loans. In 2003, my country started a new round of reform of rural credit cooperatives, and injected 1650 billion yuan of special bills or re-loans into rural credit cooperatives to solve the historical burden of rural credit cooperatives.

Commercial credit: the basis of business cooperation
From 1596 to 1598, a well-known man named Barentsz, a Dutch sea captain, tried to find a route to Asia from the north.He passed through Sanwenya and reached a Russian island, but they were trapped by the frozen sea.

Sanya is located within the Arctic Circle, where Captain Barents and 17 Dutch sailors spent eight months of long winter.They removed the decks of the boats for fuel to maintain their body temperature in the freezing cold of minus 8 degrees; they hunted for clothing and food to survive.

In such harsh and dangerous conditions, 8 people died.But the Dutch merchants did an unimaginable thing. They left the goods entrusted to them by others, and among these goods were clothes and medicines that could save their lives.

From winter to spring, the surviving merchants finally brought the goods back to the Netherlands almost intact, and delivered them to the consignor.They used their lives as the price, kept their faith, and created the business rules passed down to future generations.At that time, such an approach also brought obvious benefits to Dutch merchants, that is, they won the world market for seaborne trade.

This is a famous story that embodies commercial credit.So please think about it, what is the meaning of commercial credit?

Commercial credit is the most important part of the social credit system. Because of its great externality, it affects the development of other credits to a certain extent.From a historical perspective, traditional Chinese credit is essentially a moral concept, consisting of two parts: one part is the private credit of a self-sufficient, status-based acquaintance society; the other part is the contract of interdependence Social business credit.

To be more specific:
Commercial credit is a common credit relationship formed by enterprises due to deferred payment or advance receipts in normal business activities and commodity transactions.

Commercial credit is the credit granted by one enterprise to another enterprise in the process of selling goods.For example, a raw material manufacturer grants credit to a product manufacturer, or a product manufacturer grants credit to a product wholesaler, and a product wholesaler grants credit to a retail enterprise.

Commercial credit refers to the form of credit provided between industrial and commercial enterprises and directly related to commodity transactions.Including the credit provided between enterprises in the form of credit sales installment payment and the credit provided in the form of down payment on the basis of commodity transactions.

In a word, business credit is related to all aspects of our daily business life.

In essence, commercial credit is the commercial trust and praise based on subjective honesty and objective fulfillment of promises.The so-called subjective honesty means that in commercial activities, both parties to the transaction are subjectively honest and good-hearted, and have no other fraudulent intentions or purposes other than the concept of fair trade; the so-called objective fulfillment of promises means that the commercial subject should Oneself is responsible for the effective intention expressed to the other party in the transaction, and should make it actually fulfilled.

The main forms of commercial credit are: purchase of goods on credit, advance payment and commercial draft.

Buying goods on credit is a very typical form of commercial credit.There are three types of whether to pay a price on schedule: free credit, priced credit and extended credit.

(1) Free credit, the credit obtained by the enterprise without paying any price, generally includes the statutory payment period and the discount period allowed by the seller.At present, the accounts payable in my country's "debt" method is free credit with no time limit, which is easy to cause arrears.

(2) Cost credit.It refers to the credit that the enterprise needs to pay a certain price to obtain.

(3) Extension credit.It means that after the expiration of the credit period provided by the seller, the enterprise obtains credit by delaying payment.It is a clear violation of the settlement system, and it will affect the reputation of the enterprise, so it is not advisable.

Advance payment refers to the credit behavior that the seller collects part or all of the price of the goods from the purchaser in advance according to the contract or agreement.It is equivalent to borrowing a sum of money from the purchaser first, and then repaying it with goods. This is another typical form of commercial credit.

Commercial bills refer to the bills that reflect the relationship between creditor's rights and debts issued when units conduct deferred payment commodity transactions according to purchase and sales contracts. It is an existing commercial bill.

A commercial draft must be accepted, that is, the relevant party signs and seals the draft, expressing acceptance of payment when it is due.According to different acceptors, commercial drafts are divided into commercial acceptance drafts and bank acceptance drafts.

Commercial drafts can be used in the same city or in different places.The time limit for draft acceptance is agreed upon by both parties to the transaction, usually 1 to 6 months, and the longest is no more than 9 months.In the case of installment payment, several installments of bills of exchange with different terms shall be issued at one time.After a bill of exchange is accepted, the acceptor, that is, the payer, is obliged to pay the bill unconditionally when it is due.

A commercial draft is a promissory note, which is a written document reflecting accounts payable or receivable, and is treated as a note payable or a note receivable financially.The use of commercial bills of exchange can play a role in settlement by appointment and prevention of arrears.When bills of exchange mature, they must be settled by bank transfer, and this kind of commercial credit is included in the track of bank credit.

As a kind of commercial paper, commercial bills can be divided into two types: non-interest bills and interest-bearing bills.Interest-free notes are free credit.If an interest-free note is issued, the interest on the note is the financing cost of the note payable.

In fact, in economic life, credit is like currency. Although it is used, it is in a state of depreciation at any time, and the same is true for commercial credit.Why would it depreciate?Because the economy is developing, because there are bubbles in the economy.It can be said that most of the economic crisis is caused by the credit crisis, because the credit crisis will generate a crisis of trust, and thus form a vicious circle until the economic cycle is destroyed.

Personal credit: your exclusive financial identity card
At the beginning of June, Ms. Hu finally took a fancy to a satisfactory second-hand house. Her own savings and the loan provided by relatives and friends were just enough for the down payment, but when she went to the bank to apply for a loan, an accident occurred. Ms. Hu was rejected by the bank due to her bad personal credit. .The reason is simple: she applied for a student loan while she was in college, and her parents have been helping to repay the loan after graduation. However, due to negligence, she sometimes failed to repay the loan in time, resulting in a negative record on her personal credit report.Ms. Hu was depressed, but there was nothing she could do. The house she was looking forward to was finally missed, and she didn't know whether this credit stain would have a negative impact on her future life...

For many Chinese, personal credit is still a new vocabulary.So what does personal credit mean?How will it affect our financial life?

The so-called personal consumption credit refers to the purchase of goods from commercial enterprises by individuals on credit, including the consumption credit provided by financial institutions to individuals.The objects of personal consumption credit are mainly durable consumer goods, such as housing, automobiles, furniture, electrical appliances, etc., and even education, medical care and various labor services.Personal business credit is the personification and concretization of corporate credit, and it is the concentrated reflection of corporate credit relationship on the individual operator.

Personal credit can be regarded as another kind of "identity card" for you.Don't underestimate your personal credit. A good credit record is your precious wealth, which can bring convenience to you in many aspects such as applying for credit business, job hunting, and going abroad.However, if due to various reasons, some negative information appears in your credit report, for example, credit card repayment in full and in time, loan overdue repayment, etc., these information will be truthfully displayed on the personal credit report, when the number of these records When you apply for a credit card or loan, financial institutions may think that you have a weak sense of credit or bad repayment habits and refuse to give you a loan or reduce the amount of the loan.This will cause you a lot of trouble.

When you go to the bank to apply for a loan, the bank staff will check your credit history with your authorization.If the records show that there are borrowings that have not been repaid in time and fees that have not been paid in full on time, your application for a new loan may not be approved. After all, people who renege on debts are not welcome.If you have a good credit history, you will be able to get a loan more smoothly and even get some discounts.

Of course, for banks, credit records are only an important reference for loan review and management, not the only basis. Banks will also conduct comprehensive investigations and verifications of personal credit status through other channels.

The emergence of personal credit is very necessary, and it is also an important part of financial credit.For example, when borrowing money, you tell the other party that you are a very credible person. Although you swear, but the words are empty, the other party still cannot believe you. Therefore, judging whether a person is trustworthy depends on his actual actions.Actions require objective records. Without records, people will have no way of knowing his past and judging his future.

In the personal credit information system, it objectively records a person’s past credit activities. It mainly includes three types of information: the first type is basic information, including personal name, ID number, home address, participation in social insurance and provident fund information, etc. The second category is personal credit activity information, including information on loans, credit cards, guarantees, telecommunication bills, public utility bills, etc.; the third category is personal public information, including tax arrears, court judgments, and other information.

In our country, personal credit is still in its infancy, but in countries with developed credit systems, personal credit records are widely used, and are used in loans, renting houses, buying insurance and even job hunting.A good credit record will bring many benefits to an individual. He can enjoy lower loan interest rates, obtain a higher credit limit, and can handle various procedures more conveniently. Credit has also become an instant real wealth.

(End of this chapter)