Would rather "squeeze toothpaste" than "slam open the gate"
In June 2013, China's "money shortage" is still in sight: capital shortage, interest rates skyrocketing, market turbulence, and panic. Capital is like water. The money market is a big pool. The central bank controls the amount of water. At the time of "money shortage", the water level was greatly reduced, the pond fish suffered, and SLF (standing lending facility) came out for the first time, injecting rain into the money market.
Nowadays, SLF has become one of the means frequently offered by the central bank to adjust market liquidity. And the market is not as good as the aftertaste of the central bank's 500 billion yuan of water last month. After a month, the central bank changed the soup and didn't change the medicine, and again released 200-400 billion yuan of water. The economic downturn forced the central bank to release water, which seems to be the law. The same as last time, this time is still in the sensitive time point of heavy economic data release, and the economy is facing downward pressure.
But the problem is, according to the third quarter financial statistics released by the central bank last week, the M2 growth rate at the end of September was 12.9%, close to the 13% regulatory target value, showing that the market is not short of liquidity. At this point, the question arises: why is the central bank eager to release liquidity? And do banks lack liquidity?
"In fact, the central bank deeply understands that the current high financing cost of the real economy is a structural problem, and the aggregate policy is in a dilemma." Zhong Zhengsheng, a macro analyst at Guosen Securities, said that relaxing the monetary policy would lead to debt inflation and tightening the monetary policy would aggravate crowding out, which is the image of the dilemma of the central bank.
SLF truth
A number of bank related people confirmed to reporters that the central bank has launched SLF to 11 banks, including joint-stock banks and some large city commercial banks, with a total scale of 200 billion-400 billion yuan, each with a term of 20 billion yuan for three months, but the interest rate is about 4%. "These include Shanghai Pudong Development Bank, industrial bank and other joint-stock commercial banks." A share-holding banking industry person said frankly.
Standing loan facility (SLF) was established at the beginning of last year. According to the central bank, the main function of SLF is to meet the long-term large amount liquidity demand of financial institutions, with a maximum period of 3 months. At present, SLF is mainly operated in a period of 1 to 3 months, and the interest rate level is determined comprehensively according to the needs of monetary control and the way of issuance.
The head of Shanghai head office of a joint-stock bank responded to the rumor in an interview: "the central bank has known about the situation, and we are still in the process of application. Unlike the outside, the funds are not in place, but in the process of application."
"The central bank clearly requires that funds be used to support the weak links of the national economy such as agriculture, rural areas, farmers and small and micro businesses, and that the loan interest rate be lower than the normal level." A central bank insider said that at present, the market liquidity is "super loose", the central bank's policy signal is very clear, and any expectation of market interest rate rising "can be broken".
On October 21, the central bank launched a 14 day repurchase operation with a bid winning rate of 3.40%. This time, the volume of positive repo operations was the same as that of the previous period, and it was the fifth time in 14 days that the volume of positive repo operations remained unchanged at 20 billion. "Intended to guide market interest rates down." The central bankers said frankly.
But the reporter learned in the interview that not all banks have capital needs. Generally speaking, according to the procedure, commercial banks can apply to the central bank to obtain funds through SLF or other liquidity instruments when liquidity is tight. "But there is no problem with the liquidity of China Merchants Bank. In the near future, it has not applied to the central bank for liquidity demand, nor has it received the central bank's notice on directional liquidity loans." Li Hao, executive vice president of China Merchants Bank, confirmed to reporters.
When the reporter interviewed Wang Hongzhang, chairman of China Construction Bank earlier, it was just when the rumors of "the central bank has invested 500 billion yuan of liquidity to the five major banks through SLF" became more and more fierce. Wang Hongzhang clarified to our reporter, "the central bank just came to ask for our opinions, but the current liquidity of China Construction Bank is abundant, and there is no need to apply to the central bank."
"Although the banks are not short of funds, under the economic downturn cycle, the real economy is weak and the bank's risk tolerance is low, so although there are not many credit expansion, the pulling effect on economic growth is not obvious." According to the above central bankers, interbank liquidity is generally loose, and the problem of financing is not quantity but price.
One common sense is that the three-month SLF is a short-term financing method. Three months later, the commercial banks should pay back the funds to the central bank with interest and capital. Both SLF and PSL (collateral plus loan) are tools for central banks to release base currency, which is different from directly reducing the reserve ratio. Therefore, the above central bankers suggest that it is more appropriate to provide short-term loans to commercial banks from the perspective of asset liability management.
But what the central bank does is not trade, the purpose is not profit, and the policy focus is to achieve the goal of monetary policy. "There are four objectives of monetary policy: price stability, economic growth, full employment and balance of payments." The above central bankers said frankly that as prices have hit a new low for 56 months in a row, the central bank is currently worried about how to stimulate economic growth and achieve full employment.