Is the interest rate management of deposits assessed by the MPA, and high interest rates will end?

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Is the interest rate management of deposits assessed by the MPA, and high interest rates will end?
The reporter confirmed from a bank on March 9 and issued the “People’s Bank of China’s Notice on Strengthening Deposit Interest Rate Management”, which clearly replaced the structured deposit minimum return rate with the scope of self-regulation management, and will deposit interest rate management regulationsExcept for self-discipline requirements, Macro Prudential Assessment (MPA) is excluded.Initially, people believed that this would regulate the bank’s high-interest-rate reserves.Specifically, the notice proposes that, first, all deposit financial institutions should strictly implement the relevant regulations on supplementary deposit interest rates and interest settlement management, and rectify irregular deposits of “innovative” products such as pre-payment of fixed deposits and pre-payment on file according to the regulations.The second is to guide the market interest rate pricing self-regulatory mechanism to strengthen the deposit interest rate self-regulatory management, and convert the structured deposit guaranteed yield to replace the self-regulatory management scope.The third is to separate the MPA’s implementation of deposit interest rate management regulations and self-discipline requirements from MPAs, and at the same time guide the market interest rate pricing self-regulation mechanism to replace the above-mentioned situation with financial institutions’ prudent and prudent assessment.”The notice will form a constraint on the bank’s high-interest deposits.”” Senior observer Bi Yanguang analyzed that although the red line of the deposit-loan ratio assessment has been cancelled in recent years, the funding pressure of some small and medium-sized banks is relatively relative. In addition, in recent years, the deposit interest rate float restrictions have been relaxed, and banks are still rushing to adjust high interest rates to pull deposits. It is still commonThis notice is to regulate this kind of behavior, otherwise too much exposure will cause vicious competition.The structured deposit mentioned in the notice is a weapon for a large number of banks to take up deposits.A banker told the sauna and Yewang that the purpose of the bank ‘s issuance of structured deposits is mainly to absorb deposits, but also to raise interest rates in disguise and collect deposits at high interest rates.And it is common for banks to use these deposits as pledges and then issue some bank notes to do some off-balance sheet business.Supervision has fought against chaos.In October 2019, the China Banking and Insurance Regulatory Commission issued the “Notice on Further Regulating the Structured Deposit Business of Commercial Banks”, which vigorously cracked down on the concept of alternative structured deposits, implying capital preservation.The document requires a strict distinction between structured deposits and general deposits. The sales of structured deposits should refer to the bank’s wealth management sales regulations and further strengthen investor protection.Banks’ high interest rates will also cause their own costs to rise, how to reduce pressure?In the context of the current monetary policy focus on reducing the cost of physical financing, some discussions about whether the benchmark interest rate of deposits should be lowered are very lively.Wen Bin, chief analyst of China Minsheng Bank, believes that lowering the deposit interest rate is necessary and urgent.He analyzed that the current monetary policy is mainly carried out through the marketization of interest rates. The new mechanism of loan market quoted interest rate (LPR) has played an active role in reducing financing costs, but it is still somewhat vague in terms of structure and effect, because theThe interest rate of borrowing facility (MLF) cannot be continuously changed, and the change of MLF interest rate is more of a transmission policy variable, which has a limited effect on reducing the overall debt cost of banks.”The cost of funds of other banks due to high debts also points to the downward trend of LPR.The RRR cut is indeed important, but the RRR cut in the early stage did not move in January, and the RRR cut once released 800 billion yuan, which accounted for a small proportion of bank liabilities.It is the deposits of residents and enterprises that really affect the cost of banks, which account for more than 60% of the bank’s entire debt.”Wen Bin said.Initially, he also expressed his recognition of the benchmark interest rate for deposits many times.On January 16, Sun Guofeng, director of the Department of Long-term Monetary Policy, pointed out at a press conference on financial statistics that the expansion of the benchmark interest rate for deposits will be deployed in accordance with the State Council’s deployment, taking into consideration the price and other circumstances, and adjusting it in a timely manner.On February 20, the long-term deputy governor Liu Guoqiang pointed out in his article that the benchmark deposit interest rate is the “ballast stone” of the yield system and will be retained for a long time.In the future, we will comprehensively consider economic growth, price levels and other fundamental conditions, and make timely and appropriate adjustments.As of now, it is expected that the benchmark deposit rate will remain unchanged at the October 2015 level.Editor Xu Chao proofreading Jia Ning