Macro-Finance Salon (No. 94): Building World-Class Investment Banks with Chinese Characteristics

2018-06-08 IMI

On May 23, Macro-Finance Salon (No.94), jointly organized by IMI and the School of Finance of Renmin University of China was successfully held in conference room 801 in Mingde Main Building. Liu Qingsong, member of IMI Academic Committee, delivered a speech. Other participants include Feng Bo, IMI Academic Committee member, former general manager of Dalian Commodity Exchange, Wang Changyun, IMI Academic Committee member, director of the Academic Committee of the Hanqing Advanced Institute of Economics and Finance of Renmin University of China, Gang jianhua, IMI research fellow, Associate Professor of School of Finance of Renmin University of China, Li Xin, IMI research fellow, Professor at Institute of Finance of Capital University of Economics and Business (CUEB), Xiong Yuan, IMI research fellow, Golden Sun Securities Co., Ltd’s chief macro analyst, special economic analyst of Xinhua News Agency, Zhang Yu, IMI research fellow, director of Macro Fixed Income Research Center of Minsheng Securities Research Institute, co-director of the Asset Allocation and Strategic Investment Research Center. The conference was chaired by Zhao Xijun, member of IMI Academic Committee, professor of the School of Finance of Renmin University of China. Liu Qingsong delivered a keynote speech entitled “Building World-Class Investment Banks with Chinese Characteristics”. The speech covered policy suggestions, basic connotations of world-class investment banks with Chinese characteristics, opportunities for major international investment banks and references we can draw from, successful experience of securities joint ventures, the overall planning for building world-class banks with distinct Chinese features, and several policy designs. First, domestic and foreign investment banks are the core players of capital market. Investment banks are important organizer and executors of modern capital trading activities. The capacity of a country's investment banks basically determines the development level, function and service radius of its capital market. Second, Liu Qingsong defined that “world-class investment banks with Chinese characteristics” should enjoy a relatively high market share in China, and their capacity should represent the highest level of its kind. In the international capital market, they should be strong competitors, good executors that have strong influence. They should be able to represent China, so they are internally called “the national team”. They should be loyal to its country, should have the will to serve its nation, be capable and have a strong sense of responsibility; readily serve the interests of its country, and act in line with China’s national strategy and will. This is important. In terms of experience and lessons to learn, Liu Qingsong emphasized the characteristics of major international investment banks, whose unique core competence is developed during the long-term market competition. International investment banks like Goldman Sachs and Morgan Stanley are all transactional banks. We also found from our studies that they base their development on transactions from the very beginning, namely, they focus on their own core competitiveness, without which they would not be able to prosper and earn international competitiveness. Last, Liu Qingsong elaborated on two major aspects in terms of policy design. One is relevant system construction, and the other is relevant policy system. Both require the Chinese government adhere to the principle of deepening its reform: to implement the Nineteenth CPC National Congress spirit; to implement “Negative List +Core Principles for Effective Banking Supervision”; to improve innovation mechanism of business models and products; to substitute “market-driven” for “supervision-driven” management model and others. In the discussion session, the participants proactively interacted with each other, exchanging ideas to the fullest. Discussions covered hotspot issues including “how should Chinese investment banks better exert their influence and enhance competitiveness after being internationalized”, “future criteria for selecting personnel”, “Chinese government’s supervision on investment banks”, “future talent development”, “international strategy design in the future”, “risk prevention” and “investment banks’ role in renminbi internationalization”.

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Macro-Finance Salon (No. 94): Building World-Class Investment Banks with Chinese Characteristics

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