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CCDC Supported MOF’s International Financial Organization Loan Pledge Operation

Recently, in cooperation with CCDC, the Department of International Economic and Financial Cooperation at the Ministry of Finance of PRC (hereinafter referred to as "International Department") has successfully launched the international financial organization loan pledge business through the CCDC Collateral Management Service System. The initial business involved loans from 5 institutions with a total amount of 590 million USD and 527 million euros, and the face value of pledged bonds amounted to a total of 10.61 billion yuan. This initiative marks a new expansion of business radius of CCDC Collateral Management Service into international financial cooperation, in addition to its service to Treasury cash management business.

International financial organization loans are loans issued by international financial institutions, including the World Bank (IBRD), the Asian Development Bank (ADB), the United Nations Agricultural Development Fund, etc., which are jointly financed and organized by a number of governments. The goals of these loans are to exploit natural resources, develop economy and balance the BOP of the membership. The use of international financial organization loans is an important driver of China's reform and opening up, and one of the important channels for the introduction of foreign investment.

The launch of MOF’s international financial organization loan pledge business through the CCDC Collateral Management Service System marks the establishment of a modern collateral management mechanism in China’s international financial organization loan project management. By providing services such as automatic selection, calculation, pledge, monitoring of market value and automatic substitution, CCDC’s system can automatically managed the collateral in an efficient, intelligent and safe manner. This initiative, on the one hand, corresponded to the international understanding that collateral is the basis of liquidity and risk control, and is an important symbol of China's international financial organization loan projects conforming to international practice. On the other hand, as the international financial organization loans by natures are sovereign debts guaranteed by the borrowing governments’ credibility, the introduction of collateral management mechanism will further strengthen China's financial risk control disciplines and improve the management level of China’s international financial organization loan projects on an institutional, standardized and legal footing.

 

    Publish on :06/16/2017 11:52
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