By Zhu Hongming, Research Institute of Finance, DRC

Research Report No.26, 2016 (Total 4909) 2016-3-21

Abstract：This report reviews the financial operation in 2015 from three perspectives, namely, financial efficiency, financial stability, and adverse financial externality, and also offers relevant suggestions on financial performance in 2016. In 2015, viewing from financing cost and capital allocation structure, the services provided by financial sector to real economy” had not been effectively improved. Financial risks kept arising, with continued rebound of non-performing loans and the rapid increasing of leverage ratio, yet this risk was still under control. The imbalance between financial sector and real economy became exacerbated, and the adverse financial externality got further intensified. In 2016, with regard to financial efficiency, nominal and real financing costs are expected to come down, but the capital allocation structure is yet to be further improved. Financial risks will keep looming up, yet still under control. In respect of adverse financial externality, the rebalance process of financial sectors and real economy is expected to experience a start. Relevant policies should be made in order to lower the financing cost, optimize the capital allocation structure, keep financial stability and ensure the rebalance of financial sector and real economy.

Key words: finance, financial efficiency, financial risk, financing cost, real economy