Research On Disposal Of Non-performing Loans Of Banking Industry Under Strict Supervision Background

Since the beginning of 2017,the government has been continuing to implement financial deleveraging policy and prompt financial institutions to focus on their main business and strengthen their ability to serve the wider economy,and stop them being distracted from their intended purpose.With the policy effect increasingly prominent,preventing financial risk and strengthening financial regulation has become the main concern of the financial industry.In 2018,“strict supervision”is continuing to push ahead.The tasks of rectifying the banking industry's chaos have further refined the requirements of banking regulation.Downward pressure on the economy has continued to mount,and banking industry have met with no small number of dilemmas,including the consistently declining growth of lending,the accelerating accumulation of non-performing loans(NPLs)and the enormous disposal pressure of non-performing loans.In confronting the new environment,the commercial banks have maintained the focus on preventing and diffusing credit risks,and the main topic of banking industry is to dispose the NPLs in compliance with current laws and regulations.The commercial banks dispose the non-performing loans using traditional methods and innovative methods.The traditional methods mainly refer to collection,restructuring,verification and transferring or selling,while the innovative methods include securitization,debt-to-equity swaps and Internet Plus model,there are advantages and disadvantages in each disposal method.Generally speaking,the traditional disposal methods are more common,simple and direct,even rapid as well.However,there are also dilemmas and barriers during practice,thus regulatory arbitrage activity with non-real disposal methods occurs.In order to speed up the disposal process,the commercial banks adopt illegal operation while using traditional method,such as using a variety of“channel-based innovations" to remove NPLs out from the Balance Sheet,not only the NPLs not be disposed,but also big hazard occurs.On the other hand,although the structure of innovative disposal method is more complicated,and it's difficult to implement it at present with some policy restrictions,but the operation is more standardized and prospect are broader.Further being applied is also promising.Therefore,based on the regional macro environment and institutional characteristics,the commercial banks should consider the business type and disposal time,adopt flexible disposal method to dispose NPLs,combining internal collection and external disposal,complementing traditional and innovative methods.This article take the NPLs of commercial banks under the restrict regulation as research object,using the comparative analysis methods and case analysis methods to make a research.Firstly,the article systematically makes a definition of NPLs,then sorts out the NPLs' historical change,current status and characteristics,and studies the cause of NPLs from macro and micro aspects.After comparing the advantages and disadvantages of different NPLs disposal methods and making a case analysis of various illegal NPLs disposal modes,the article finally propose how to choose NPLs disposal methods and make a suggestion on how to smooth the NPLs disposal from commercial banks and regulatory authority angles.