Top Teaching Faculty at FISF Gathered at Closing Course, Discuss General Trend of High-quality Financial Development

Release time：2021-10-15    

On September 24^th 2021, the online series course of “2021 Fudan Financial Course” launched by FISF concluded successfully. Professor Jun Qian, Executive Dean of FISF, Professor Charles Zhang, Deputy Dean of Academics, and Professor Huangsheng Gao, Deputy Dean of Faculty and Research, gathered on the cloud to conduct in-depth dialogues with Professor Shang-Jin Wei, Academic Visiting Professor of Finance and Economics at Fanhai International School of Finance (FISF), and Professor of Finance and Economics at Columbia University on the topic of “High-quality Financial Development: General Trend”. Starting from their respective fields of research, the four top professors in finance at FISF made forward-looking analysis on the financial system in China from perspectives of debt issues, fintech, reform of the capital market and etc, presenting an engaging forum for students.

At the beginning of the course, Professor Jun Qian first gave a heavyweight sharing entitled “‘Dark Rhino’ in China’s Finance Industry in 2021: Debt Issues, Risk Conduction and Resolution”. He came straight to the point that the “Dark Rhino” in China’s financial system was a debt issue mainly represented in the high debt rate of certain local governments and non-financial industries. According to various plates of the society, the highest debts lie in non-financial industries, also called the real economy; according to various industries, the real estate industry is among those with the highest debt rate. As for the route of debt risk conduction, Qian analyzed that currently the concentrated outbreak of debt risks are mainly manifested concentrated debt maturity default of one or multiple large enterprises, which may cause a sharp increase in the bad debt rate of banks within a short time. The default risk will be deteriorated if bank runs appear in other high-debt enterprises closely related with the defaulting enterprises. Therefore, he stressed that the critical point to resolve the risk of debt issues is to cut off the conduction route of risks among financial institutions so that the bank running risks with creditors can be avoided.

Next, Professor Charles Zhang gave an in-depth analysis, entitled “Fintech Opening Private Equity Market”, on the equity financing mode reform brought by fintech. He first pointed that at present many large enterprises in the US no longer need to list in the public market to finance. Instead, substantial financing can be achieved through channels of private placements. Taking the equity trading system for example, enterprises don’t need to list to disclose information on an open trading platform. When investors see such a more liquid and profound information disclosure, the enterprise evaluation will rise accordingly while the risks can also be resolved. Zhang indicated that the liberalization of equity transfer can lead to information disclosure, effective regulation and trade liquidity, promoting the overall listing mechanism to some extent and building a bridge between the primary market and secondary market. In the future, it can be taken into consideration to take advantage of blockchain to establish a platform where the property rights are clearer and the transactions are more transparent, achieving better protection on investors.

Subsequently, Professor Huasheng Gao gave a speech on “Exploring Critical Elements for Second Board Stock Market to Succeed from the Establishment of Beijing Stock Exchange”, talking about the reform process of China’s capital market. He held that China’s stock exchanges are faced with a dilemma when formulating the listing standard. A higher listing standard will make it more difficult for small- and medium-sized enterprises to list on the main board; while a lower one will lead enterprises below the standard to list on the second board market, which may cause damage to investors’ interests. In consequence, Gao emphasized that the critical element for the second board market to succeed is its protection on small- and medium-sized stockholders. “With enhanced protection on small- and medium-sized stockholders, there will be lower risks of damage to their interests and greater desires of investment. Enterprises can gain more financing and higher evaluations, and a larger number of good enterprises can be listed. On the contrary, if the protection on small- and medium-sized stockholders is weakened under the banner of diversified listing standards, the stockholder interests will be damaged ultimately and good enterprises will be less likely to be listed.”