On Jan.19, 2013, the 3rd Tsinghua PBCSF Financiers Forum was held in Beijing. The forum's discussions were centered around the theme "GrowthDecline-World EconomicFinancial Trends".

The forum was hosted by the Tsinghua University PBC School of Finance,cohosted by the Alumni Office of the PBC School of FinanceWudaokou Alumni Association. More than 300 prominent members from domestic banks, financial institutionsacademia were in attendance,  including Honorary Chairman of the school board, former Vice Governor of the People's Bank of ChinaFounding Chairman of China Securities Regulatory Commission LIU Hongru, Board Member, President of the Wudaokou Alumni Association and Chairman of the Oriental Patron ZHANG Zhiping, Class of 1981 alumnus and Chairman of the Liu Hongru Educational Fund WEI Benhua, Board ChairwomanDean of the PBC School of FinanceVice Chairwoman of the National People's Congress FinancialEconomic Committee WU Xiaoling.

GUAN Guisen, school alumnus, President of Innovation Pay,Vice PresidentSecretary of Wudaokou Alumni Association, presided over the forum. Keynote speeches were offered by celebrated Economistschool Ph.D. supervisor WU Nianlu, class of 1986 alumnusCICC Chief Economist PENG Wensheng, class of 1999Essence Securities Chief Macroeconomist GAO Shanwen, Senior Economist of the Board of Governors of the Federal Reserve Systems ZHOU Hao, class of 2002 alumnus, Chief Economist of Chief SecuritiesPresident of Chief Institute ZHAO Yue,class of 1993 alumnusVice PresidentResearch Director of Gao Hua Securities MA Ning. 

 

LIU Hongru, Honorary Chairman of the School Board

The speakers touched on issues concerning China's urbanization, shadow banking, US macro-prudential regulatory framework, systemic banking risks in regards to the European debt crisis, US sovereign debt crisis, European debt crisis,leverage ratios in Chinaaround the world. 

 

The recently closed Central Economic Work Conference suggested vigoroussteady efforts be made to advance urbanization, which has been a consistent driver of economic growth in China. In his keynote speech, Chief Economist of the CICC PENG Wensheng revealed that urbanization in China faces two challenges, the resistance to changes in the dual urban-rural structurethe shrinking of rural labor transfer space. The original pattern that the nation has followed in previous attempts at urbanization has not been sustainable. We must pursue a new patternequal access to public servicesoverall ruralurban development are given more emphasis. To meet these ends, broader reform of the entire economic system is necessary to improve the economy's supply capacityenhance economic restructuring. He highlighted that the housing bubble is a challenge both to urbanizationsustainable development.

 

PENG Wensheng, CICC Chief Economist

With the Banking industry currently facing the dual stresses of external shocksinternal restructuring in 2013, the system's resistance to risk has been the focus of serious concern. The 2013 National Banking Regulation Work Teleconference emphasized the priority of preventing systematicregional risk. Compared to other risks within the financial services industry, shadow banking has consistently received the most attention. GAO Shanwen, Chief Macroeconomist of Essence Securities, briefed the audience on the root causes of shadow banking in Chinaits impact. He stated that the low level of foreign reserve funds outflow, tighter constraints on loan-to-deposit ratios at commercial banks,credit demand tightening in non-state owned sectors have contributed to the buildup of shadow banking in China. Against this backdrop, enterprises seem to have serious issues regarding maturity mismatches in terms of fund utilization, which has led to flattened yield curves in bond markets. According to GAO, financial deepening (total financial assets/ GDP) still has a very long way to go in China. 

 

GAO Shanwen, Chief Macroeconomist at Essence Securities

WU Nianlu, EconomistDoctoral Supervisor, said that the world has now entered a "post-crisis era",the economic recovery will be a laborious, slowpainful process. The world is witnessing a shift in the balance of powera "regrouping" of the global economic landscape. China will need to shoulder the responsibilities that come with being a superpower,contribute to the establishment of a new world economicfinancial landscape that is characterized by fairnessstability. Therefore, he provided solutions including restructuring world financial systems, addressing the world economic imbalance, balancing the realvirtual economies,promoting the internationalization of the RMB. 

 

WU Nianlu, Economist

ZHOU Hao, Senior Economist of the Board of Governors of the Federal Reserve System, elaborated on the "US Macro-prudential Regulatory FrameworkBanking Systematic Risks in European Debt Crisis". He pointed out that the international financial crisis has contributed to shaping a macro-prudential regulatory framework,explained to the gathered audience the US macro-prudential regulatory framework, with the Financial Stability Oversight Council (FSOC) as the supervisory agency. He introduced measures to definequantify systematic risk, the classification of such measures,macro-prudential measures utilized as a hedge against catastrophic insurance premiums. Through empirical tests of the systematic risks of the European banking system, he explored the factors of systematic riskshow such risks change over time. 

 

ZHOU Hao, Senior Economist of the Board of Governors of the Federal Reserve System

ZHAO Yue, Chief Economist of Chief Securities, held that the US has been doing an excellent job in terms of economic recovery since 2010, but may experience excessive liquiditydownside risk in the fixed income market at an indefinite future period. In relation to the European debt crisis, he proposed that economists tend to underestimate the differences in the economic structures of the Eurozone nations,overlook differences in languageculture. To him, language differences are a significant barrier to the free flow of labor. German-speaking regions benefit most from an integrated market, while Latin-speaking countries suffer from continuous trade deficits after losing the automatic balancing mechanism of international trade without an independent currency. He advocated that to quell the Eurozone crisis, fiscaleven lingualsovereign integration to some extent is required. 

 

ZHAO Yue, Chief Economist of Chief Securities

MA Ning, Vice PresidentResearch Director of Gao Hua Securities, touched upon the topic "Comparing ChinaInternational Leverage Ratiostheir Implications on Financial Systems". He suggested that Chinese banks are unlikely to face systematic risks. Thanks to the robust profitability of domestic businesses, the bad loan ratio of the banking industry is unlikely to exceed 10%. In order to achieve sustainable ROEvaluation of banks, we need to encourage consumption loans to stimulate domestic consumption, boost China's GDP,maintain the sustained profitabilityROE of businesses throughout the country. 

 

MA Ning, Vice PresidentResearch Director of Gao Hua Securities 

At this forum, our six speakers shared with the audience their expertiseperspectives on domesticinternational economicfinancial trends. The PBSF Financier Forum will continue to serve as a platform promoting communication between renowned financiersthe public.  

 

Assembled Attendees