Performance,Problems And Countermeasures About Market-oriented Debt-for-equity Swaps Of Bank

On June 23,2016,the State Council held a press conference on a new round of debt-to-equity swap,at which the NDRC said: To implement debt-to-equity swaps,the choice of debt-to-equity swaps enterprises,the transfer price of creditor’s rights and the way of equity withdrawal should all reflect the marketization.On October 10,2016,the State Council issued two important documents.With the issuance of the two documents,a new round of market-oriented debt-to-equity swap was officially launched.Since the 1970 s and 1980 s,new opportunities for economic development have come to the world.Many countries have used leverage and other economic theories to develop economic and social construction.At the same time,the non-performing loan rate of commercial banks in various countries is on the rise.Poland,the United States,Japan and South Korea have tried different ways to eliminate non-performing loans.When trying the method of debt-to-equity swap,we found that it can reduce the non-performing loan rate of banks to varying degrees,improve the overall operating conditions of enterprises and reduce the debt burden of enterprises.So most countries will choose debt-to-equity swaps as a macroeconomic means to dissolve non-performing assets so as to carry out economic regulation and control.This paper lists the specific implementation methods of debt-to-equity swaps in several countries,and compares them with China’s debt-to-equity swaps.With the rapid development of the global economy,the demand for steel is increasing day by day.Since the reform and opening up,China has paid more attention to the construction of cities,and the steel market has always been in short supply.However,due to the rapid development of China before 2015 and the high growth rate,there will be excessive production and vicious competition in the steel market by 2015.This paper chooses Wuhan Iron and Steel Group,the leading enterprise in the iron and steel industry,and China Construction Bank’s market-oriented creditor’s rights to equity swap as research cases to analyze,respectively,from the background,implementation plan and effect of the three aspects of detailed analysis of the plan.The so-called debt-to-equity swap is actually a special way for debtors and creditors to deal with the debt relationship together,that is,to turn the debts in the hands of creditors into equity holdings of debtors.Nowadays,the economic environment and policy guidance are gradually improving.Some commercial banks in our country have begun to try debt-to-equity swap.A new round of debt-to-equity swap is an important means to promote the implementation of supply-side reform.In the context of the economic downturn,it needs to improve the non-performing assets ratio of commercial banks and strive to find new economic growth points for our country.The two debt-to-equity swaps are essentially similar,but there are also many differences.In this paper,the implementation background,purpose,significance,main body and specific scheme of the two rounds of debt-to-equity swap are analyzed and compared,and some conclusions are drawn.The significance of market-oriented debt-to-equity swap for enterprises lies in reducing the high leverage rate of enterprises,improving the quality of assets and restoring the sustainable development state;for banks,it is to reduce the rate of non-performing assets of banks and diversify their banking business.Of course,due to the differences between the new round of debt-to-equity swap and the first round of debt-to-equity swap,there will be many problems to be faced in this round of debt-to-equity swap.In order to smoothly promote the implementation of market-oriented debt-to-equity swap,the relevant departments need to put forward solutions to the problems.This paper puts forward relevant suggestions from the perspective of commercial banks and enterprises.