The following will explain the basic forms of credit according to the classification standards of trust objects.
1, Gongxin
Public credit, also known as government credit, refers to the ability of governments at all levels in a country to borrow money. The government needs huge funds to provide people with various services, such as national defense, education, transportation, medical care and social welfare. However, the increase of government tax revenue often cannot keep up with the increase of expenditure, so the government has a huge deficit every year. In order to make up the fiscal deficit, the government issues or sells various credit instruments. These credit instruments represent the government's commitment to the holders, that is, to repay the loans in the future. This commitment to repay debts comes from public institutions, so it is called public credit.
Take the United States as an example, the American government is divided into three levels: federal government (central government), state government and local government (including municipal government and county government). Governments at all levels have to borrow money from abroad every year to meet all kinds of huge expenditures.
The finance of the federal government sells the following credit instruments to borrow money and raise funds: the term of 1 year is called national debt; The term from 1 year to1year is called treasury bonds; Treasury bonds with a maturity of more than 10 years are called treasury bonds. Because the federal government has a strong economic backing and good credit, not only Americans, foreigners and even foreign governments are scrambling to buy these securities after they are issued.
Most state constitutions stipulate that the annual budget of the state government cannot be in deficit to meet the requirements of fiscal balance stipulated in the state constitution. Nevertheless, under special circumstances, the state government often can't cope with the budget and has to issue bonds to raise funds. Just because the state and local governments have limited financial resources and high credit risk, the bonds issued are not as good as those issued by the federal government.
2. Corporate credit
Enterprise credit generally refers to the credit granted by one enterprise legal person to another enterprise legal person, and its essence is the monetary loan from the seller's enterprise to the buyer's enterprise. It includes selling products on credit to customers with enterprise nature in the credit management of manufacturing enterprises. In the process of selling products on credit, the sellers are usually material suppliers, product manufacturers and wholesalers, and the buyers are the beneficiaries of the products sold on credit. They are customers or agents of various enterprises. The buyer obtains the credit granted by the seller in the name of his own enterprise. Enterprise credit also involves the credit of commercial banks, finance companies and other financial institutions to enterprises, as well as the credit generated by trade methods other than spot remittance payment and prepaid payment.
A bank is also a kind of enterprise, which specializes in credit. Bank credit is the credit given by commercial banks or other financial institutions to enterprises or consumers. In the process of selling products on credit, banks and other financial institutions provide financing support for buyers and help sellers expand sales. Commercial banks and other financial institutions issue credit to enterprises in the form of money, and the determination of loan and repayment methods is based on the credit level of enterprises. Commercial banks will require mortgage or pledge as a guarantee for enterprises that do not meet their credit standards, or guarantee companies will provide guarantees for these enterprises. The latter situation is essentially that the guarantee company provides credit to the enterprises applying for loans, which is a special form of credit.
3. Consumer's personal credit
Consumer credit refers to the transaction relationship of goods or services with the promise of future payment as the condition. In fact, consumer credit has a long history as a trading tool in the market economy. After World War II, science and technology advanced by leaps and bounds, and productivity was greatly improved. In order to sell goods, businessmen have designed many innovative marketing methods, such as installment payment, credit card, credit card and so on. The emergence of consumer credit has expanded the market scale and enabled consumers to enjoy what they want in advance.
According to the purpose of credit, consumer credit can be further divided into retail credit and cash credit.
(1) Retail Credit
Retail credit means that retailers provide products and services to consumers on credit, and it is a trading medium that consumers directly use to buy final products from retailers. In this way, enterprises or retailers have increased their sales and won more consumers. Under the condition of modern market economy, retail credit has become a means of market competition.
In retail credit, it can be divided into revolving credit, installment credit and service credit.
Revolving credit is an agreement between retailers and consumers. According to the agreement, retailers allow consumers to buy all kinds of goods through credit transactions within the pre-agreed limits.
The characteristic of retail installment credit is to ask the trustee to pay the down payment first, and then pay a fixed amount on schedule within a certain period of time until the payment is paid in full. Different from revolving credit, it is also called closed credit, because consumers must sign sales contracts with enterprises, and credit transactions will automatically terminate after the balance is paid.
Professional service credit refers to the short-term credit provided by professional service providers to consumers, which means that consumers can get professional services in advance and pay after receiving the bill. Professional service credit is similar to the above-mentioned revolving credit, except that professional service replaces actual goods.
(2) Cash credit
Cash credit is a cash loan. When consumers need cash for various reasons, they can apply for loans from financial institutions. Consumers get cash, and the credit subject is financial institutions. Cash credit is much better than retail credit: retail credit limits transactions to specific goods, while cash credit enables consumers to buy any goods and has a wider range of uses.
Cash credit, like retail credit, can be divided into installment loan, single payment loan and general credit card because of different repayment methods.
Installment loan is a loan agreement. It is agreed that the borrower will repay the loan in a fixed and regular way in the future. The borrower must provide proof of income and financial stability so that the lender has confidence in the borrower's future loan repayment.
One-off loan is a short-term loan, the loan term is usually shorter than 1 year, and it is stipulated that the borrower should pay off all the loans in one lump sum at the end of the term.
Universal credit cards are issued by banks, finance companies or financial departments of large companies, and are loan certificates pre-approved by card issuing companies for cardholders. This kind of loan usually has a credit limit, that is, the maximum limit for the cardholder to use the credit card to buy goods or pay fees.
Public debt is the abbreviation of public debt, which is the debt of the government. Public debt includes the debts of the central government and local governments, while national debt refers to the debts of the central government. China prohibits local governments from issuing bonds, so at present, China's public bonds are all national bonds. Specifically, it refers to the national debt formed by the government issuing bonds at home and abroad or borrowing from foreign governments and banks. It is an important part of the whole social debt. National debt is a special financial category. [It is first and foremost a kind of financial income. In fact, the state issues bonds or loans to raise funds, which has three functions: making up the fiscal deficit, raising construction funds and regulating the economy. The issuance of national debt should follow the credit principle of borrowing and returning. When a bond or loan matures, it is necessary not only to repay the principal, but also to pay certain interest. The national debt is subscribed voluntarily. Except for a few compulsory national debt, whether to subscribe and how much to subscribe is entirely up to people. According to different standards, national debt can be divided into different types: according to the form of state borrowing, national debt can be divided into state borrowing and bond issuance. National debt can be divided into long-term national debt, short-term national debt and medium-term national debt. The so-called long-term and short-term are comparative, and there is no absolute standard. Most countries in the world generally call short-term treasury bonds with a maturity of less than one year, long-term treasury bonds with a maturity of more than 10 years, and medium-term treasury bonds with a maturity between the two as short-term treasury bonds. According to the nature of financing and issuance, national debt can be divided into compulsory national debt and unpaid national debt. National debt can be divided into domestic debt and foreign debt according to the region where it is raised and issued. The so-called domestic debt refers to the loans and bonds issued by the state at home. The so-called foreign debt refers to the country's borrowing from other governments, banks and international financial organizations. According to the liquidity of bonds, national debt can be divided into marketable national debt and unsold national debt. State loans are non-transferable, only bonds can be sold or not.
Since the reform and opening up, the balance of China's public debt (domestic debt) has increased by 33% annually. The government issues public debt not only to make up the fiscal deficit, but also to stabilize the economic operation. Nevertheless, in China, no matter in theory or practice, or even in public finance textbooks, there is still a lack of sufficient understanding and in-depth research on the connotation of public debt management, especially public debt management policies. This paper attempts to make some preliminary discussions on some basic issues of public debt management policy.
Public debt management includes a series of links such as organization, decision-making, planning, guidance, supervision and regulation of the whole process of public debt activities. The main contents of the public debt management system include the provisions on the issuance, issuance authority and management authority of public debt, the use and management system of debt income, the provisions on the circulation of public debt, the provisions on the repayment and adjustment of public debt and the provisions on the structure of public debt holders.
1, the problem of public debt.
In the public debt management system, the authority of public debt management is based on the first-level government, the first-level finance and the first-level finance. Many countries do the same. For example, Japan's "Local Finance Law" stipulates that local governments in Japan can issue government bonds, which of course must be approved by the central government. Giving local governments a certain amount of loans plays a great role in preventing financial risks: limited decentralization of power and diversification of borrowers will enhance the flexibility of the central government in preventing financial risks, and the financial risks of the whole country will also be reduced. [7] At present, China does not allow local governments to issue local government bonds. This needs to change.
2, the use and management of debt
The laws of some countries strictly prohibit the use of debt income to make up the fiscal deficit. For example, article 4 of Japan's Finance Law stipulates that the state's fiscal expenditure must be solved by financial resources other than public bonds and loans. Only as the source of public investment expenses and investment loans can public bonds and intervention funds be issued, which is called construction bonds. [8] The reason why the use of national debt is limited to constructive projects is mainly because constructive projects have the ability to directly repay debts, which can greatly reduce the risk of financial borrowing. At present, it is inappropriate for China not to distinguish between public investment projects in the public budget and profitable investment projects in the state-owned assets management budget.
(B) the introduction of legal and economic analysis methods, cost-benefit analysis.
Public debt is a system involving many economic tools and technologies. Therefore, in order to improve the public debt system, we need to learn from the research results of economics and make quantitative analysis, so as to better reduce financial risks. The risk management of national debt includes the scale, structure, mode, scale risk, repayment scale and structural risk of national debt. For these problems, it is not for legislators to pat their heads; Moreover, the standard will change with the change of society, so legal and economic analysis methods are needed to reduce the risk of national debt technically.
(3) The procedural law should emphasize the examination and supervision of national debt.
In terms of review, we should adhere to fiscal democracy at the same time, and the scale, types and duration of the issuance of national debt need the approval of the National People's Congress. In terms of supervision, it is necessary to establish a complete debt monitoring, statistics and early warning announcement system, and disclose all kinds of public debt information to the public in a timely manner according to certain indicators. Improve the openness and transparency of review and supervision.
First, the meaning of public debt management policy
Public debt management refers to a series of measures taken by the government to control the scale and composition of public debt, adjust the structure of public debt buyers, and choose the appropriate term structure and interest rate level of public debt. Narrow public debt management refers to a series of operations to maintain the existing public debt at the lowest cost; Public debt management in a broad sense refers to all measures that affect the scale and structure of the government's outstanding debts (Note: Smith, Warren L, 1960, Debt Management in the United States, Mishra, D.K., 1985, Public Debt and Economic Development in India, Press, p. 265435). As early as the end of the 1940s, Albert, a financial economists in the United States, gave the most comprehensive definition of public debt management: "Public debt management means choosing the form of public debt and determining the proportion and quantity of different types of public debt, choosing the debt maturity structure and determining the quantity of public debt owned by different types of holders, making a decision to repay expired bonds or exchange old bonds for new ones, determining the conditions and prices of issuing bonds, treating different holders of public debt, and policies on expired bonds and newly issued bonds and their general fiscal policies of the government. (Note: Abbott, C.C., 1949, Management of Federal Debt, McGraw-Hill Books, p. 23).
The principle of public debt management depends on the objective economic conditions in different countries and different periods in the same country. Under the condition of modern economic operation, the "neutral principle" of public debt management (that is, it should not affect economic operation) has been abolished, and public debt management has been regarded as a financial policy tool to control national income and a tool to adjust income distribution together with other financial means. Therefore, according to Hansen's point of view, the basic principle of modern public debt management is: (1) government bonds must be safe and reliable investments, which must be repaid immediately at maturity and can be realized at any time. (2) Public debt must maintain its monetary value to avoid the impact of inflation and deflation. (3) Public bonds should be owned by the whole public as widely as possible, so as to cooperate with the progressive income tax system and promote the fairness of income distribution. (4) Budget control of federal expenditure, tax and debt should be regarded as the basic goal of sustained growth of national income.
The so-called public debt management policy refers to the government's policy that has an expected impact on economic operation through policy operations such as public debt types and issuance conditions when issuing new debts or repaying old debts with new debts. The essence of public debt management policy lies in the debt structure characteristics under the premise that fiscal policy stipulates the scale of public debt and monetary policy stipulates the available monetary funds and loan funds, including the types of outstanding government bonds, the ownership mode and term structure of public debt (Note: Sharp, A.M., C.A. Register and P.W. Grimes, 2000, Economics of Social Issues, Irwin/mcg.
To sum up, the basic contents of public debt management policy include the following four aspects: (1) When issuing new public debt, is it long-term public debt or short-term public debt? How to combine long-term bonds and short-term bonds? (2) What types and conditions of public bonds should be targeted at when operating in the open market? Is it to reduce the number of short-term listed bonds and increase the number of long-term listed bonds or vice versa? From the perspective of public debt management policy, the diversification of public debt types is beneficial. Because, generally speaking, the diversification of bond varieties is accompanied by the increase of bond buyers, and the number of privately held bonds will also increase, which can maintain the stability of government revenue at a certain cost. (3) When issuing bonds, how to determine the interest rate of bonds? Generally speaking, the longer the repayment period, the higher the interest rate, but the change of interest rate has little impact on the economy and the interest payment is relatively stable. On the contrary, the shorter the repayment period, the lower the interest rate, but the change of interest rate has little impact on the economy. Therefore, different interest rates lead to different effects of interest rate changes on the economy. (4) How to choose the holders of public debt? If banks, especially the central bank, are the main buyers, it will inevitably bring inflationary pressure and impact on economic stability; If enterprises are the main body of procurement, it will undoubtedly reduce the investment of enterprises in actual capital; If individuals are the main buyers, they may reduce consumption and private savings.
It can be seen that the public debt management policy is an extension of fiscal policy and monetary policy, which has great influence on the operation of the national economy.
Second, the objectives of public debt management policy
Because bond management policy is inseparable from fiscal and monetary policy, it is an independent economic policy. As a bond management policy closer to fiscal policy, its goal must meet the requirements of fiscal policy objectives. As far as the relationship between fiscal policy and economic operation is concerned, the target system of fiscal policy can be divided into three categories, namely, economic stability (including price stability, full employment and balance of payments), economic development (including economic growth, rational allocation of resources and countercyclical fluctuation) and fair income distribution. Therefore, the above goal of fiscal policy is also the goal of public debt management policy. At the same time, the national debt management policy, as an independent policy, has its own goals, such as broadening the scope of issuance and distribution of national debt, ensuring the smooth promotion of national debt, maintaining the stability of the national debt market, reducing the borrowing cost as much as possible, and achieving a balanced term structure.
Theoretically, there are two views on the policy objectives of public debt management. The first view, also known as the classical view, holds that the issuance of public debt is directly related to inflation. So if the government wants to issue bonds, it should issue long-term bonds with low liquidity. The second view, also known as the modern view, can be roughly divided into the following four categories: (1) stimulating the expected total demand by issuing short-term bonds of a certain scale; (2) Minimize the impact of changes in the composition of public debt; (3) While realizing the expected total demand, reduce the interest expense of public debt as much as possible; (4) According to the proposition of (3), under certain conditions, it can be said that the optimal composition of public debt is mainly long-term public debt.
The first view is to discuss the policy objectives of public debt management around the relationship between public debt issuance and inflation, while the second view is basically to discuss the policy objectives of public debt management around the changes in the composition of public debt, although there are some differences in many aspects.
From a modern point of view, there are sometimes conflicts between the objectives of public debt management policy itself and the overall objectives of fiscal policy. For example, from the financial point of view, the direct goal of public debt management policy is to minimize the interest burden of public debt, but from the perspective of economic stability, public debt issuance should maintain a certain liquidity. These two goals are often opposed in reality. When the total amount of public debt is fixed, if the proportion of short-term public debt is high and the liquidity is high, the market interest rate will drop. The reduction of interest rate means the increase of the value of assets held and the increase of personal consumption demand through the asset effect. At the same time, the reduction of interest rate increases the investment demand and total demand of enterprises. On the contrary, if the proportion of long-term public debt is high, the liquidity will decrease, the market interest rate will rise and the total demand will decrease. Therefore, under the premise of maintaining a certain total demand, we should properly choose the combination of short-term bonds and long-term bonds to minimize debt interest's burden.
It can be seen that how to determine the collocation of short-term public debt and long-term public debt is an important topic of public debt management policy. However, in practice, reducing the interest cost of public debt and promoting economic stability are often inconsistent: in order to reduce the interest cost of public debt, long-term bonds should be issued to reduce the interest burden during the economic recession because of the low interest rate; In the period of economic prosperity, it is advisable to issue short-term bonds to avoid increasing the high interest burden of long-term public bonds. However, in order to stabilize the economy, short-term bonds should be issued during the economic recession to stimulate the increase of total demand; In times of economic prosperity, long-term bonds should be issued to curb excessive demand (Note: Laid, w. e. 1968, The Changing View on Debt Management, Monetary Economics, ed .A.D. Entine, Wadsworth Publishing Company, pp. 465-479. In this way, there are two problems with the policy objectives: first, when the objectives of public debt management policy conflict with the overall objectives of fiscal policy, which objective should be the main objective? Second, how to solve the conflict between public debt policy objectives? As far as the former question is concerned, because the national debt management policy is only the implementation tool of fiscal policy, the goal of the national debt management policy should generally obey the overall goal of fiscal policy. As far as the latter issue is concerned, if economic stability can be achieved through monetary policy, then minimizing interest expenses can become the main goal of public debt management policy. However, if the research of public debt management policy achieves the above two goals at the same time, it is necessary to choose the type of public debt appropriately.