Ministry Of Finance Strengthens Supervision Of Financing Guarantee Corporation

In the opinion of the Ministry of finance that the local finance department is actively doing a good job in financing related guarantee business, the Ministry of Finance clearly stated that the main tasks of local financial departments at all levels include participating in the construction of local financing guarantee system, strengthening financial supervision of financial Guarantee Corporation, improving the standardization of financial management, preventing and resolving local financial risks, perfecting the regulatory system of financing guarantee industry, strengthening the management of government funded financial Guarantee Corporation, and ensuring the efficient operation of state-owned assets.

The Opinions also pointed out that local financial departments at all levels should appropriately integrate government funded financial Guarantee Corporation, promote the standardized, healthy and orderly development of the financing guarantee industry in their respective jurisdictions, and encourage conditional government funded financing Guarantee Corporation to undertake re guarantee business.

According to the insiders, in the case of bank tightening of local financing platform loans, whether local financing platforms can get loans depends on whether they can provide effective mortgage or guarantee. After the financial guarantee has been halted and the guarantee letter issued by the local people's Congress has been declared invalid, the policy Guarantee Corporation has become a guarantee tool that local governments can rely on. Therefore, it is necessary to strengthen the supervision of Guarantee Corporation on policy financing.

Sun Xiaoxia, director of the financial department of the Ministry of finance, has also pointed out that local financial departments must strictly control the business risks of financial guarantee institutions while supporting the development of financing guarantee institutions.

In addition, the Opinions also pointed out that local fiscal departments at all levels should carry out fiscal and tax preferential policies for the eligible financing Guarantee Corporation to be exempt from business tax, reserve withdrawal and compensatory loss deduction before tax deduction, and comprehensively use capital injection, risk compensation and assessment incentives to improve and improve the financial Guarantee Corporation's service capability.

This is the policy of reshuffling the financing guarantee industry following the threshold of the Interim Measures for financing Guarantee corporation management.

A few days ago, seven ministries and commissions such as the CBRC and the Ministry of Finance jointly issued the Interim Measures for the management of financing Guarantee Corporation. The "measures" clearly stated that the registered capital of the financing Guarantee corporation should not be less than 5 million yuan RMB, and if it fails to meet the requirements stipulated in the regulations, it should be rectified before March 31, 2011.

After the promulgation of the measures, the industry generally believes that this policy will accelerate the reshuffle of the guarantee industry and eliminate a group of guarantee companies with poor earnings and non-standard operations.