Study On The Leverage Of Residents In Structural Deleveraging

In 2018,the Central Committee for Finance and Economics proposed for the first time that structural deleveraging should be the basic idea and different requirements should be put forward by department and by type of debt.These measures declare that China's deleveraging work is no longer to blindly reduce macroeconomic leverage,but to pay more attention to the structural differences in the leverage ratio of various departments,making the deleveraging operation more accurate.The core idea of structural deleveraging is to resolve the problem of high leverage in the corporate sector and local government departments as soon as possible,while ensuring that the overall macroeconomic leverage declines steadily.In order to avoid the severe economic fluctuations brought about by the deleveraging process,the leverage of some departments will increase,while other departments will decrease.There is a view that the economic recession caused by deleveraging of other departments can be alleviated by leveraging the residential sector.However,some scholars believe that adding leverage to the residential sector will bring about a greater negative impact.We should stabilize the leverage ratio of our residents and even deleverage the residential sector appropriately.Excessive systemic financial risks can endanger financial stability and cause huge losses to national economic development.At the same time,international experience shows that the accumulation of systemic financial risks may lead to the outbreak of financial crisis.Therefore,supervision and prevention of systemic financial risks are very important for a country's economic development and financial stability.Thus,analyzing the impact of changes in residents' leverage ratios on systemic financial risks helps to better solve the problem of residents' leverage in the process of structural deleveraging under the condition of ensuring stable economic development.Firstly,the entropy method is used to weight the twelve basic indicators in four dimensions such as the financial institutions,the stock market,the foreign exchange market and government departments.Then,this paper further estimates the quarterly comprehensive index of systemic financial risks in China from 2007 to 2018,to measure the Chinese systemic financial risks.The results show that the current systemic financial risk in China is at a relatively high level.According to the established VAR model and the four endogenous variables of resident leverage ratio,systemic financial risk composite index,resident sector deposits and real estate prices for each quarter from 2007 to 2018,it can be found that,(1)the resident leverage ratio,resident sector deposits and real estate prices will affect the systemic financial risk composite index.The rise of the resident leverage ratio will cause the systemic financial risk composite index to decline in the short term,and then the systemic financial risk composite index will continue to rise.There was a short-term decline,which was rising in the rest of the period.(2)The change of resident leverage ratio will affect the deposits and real estate prices in the resident sector.The increase in the resident leverage ratio will reduce the deposits in the resident sector and increase the real estate prices,thereby further affecting systemic financial risks.The main conclusion of this paper is that the increase in the leverage ratio of residents will increase systemic financial risks,and the use of leverage on the residential sector to ease the downward pressure on the economy may cause greater losses to the long-term development of China's economy.Therefore,from the perspective of stable economic development,we should control the growth rate of the leverage ratio of our residents to keep them at a stable level.It is suggested that in the current stage of structural deleveraging in China,the high leverage problem of state-owned enterprises and local governments should be specifically dealt with to achieve the purpose of declining as soon as possible.At the same time,the leverage ratio of the central government can be appropriately increased to further improve China's leverage structure.