Central Bankers: We Should Not Rely On Steady Growth In Lowering Interest Rates.

The central bank cut interest rates this time, so that those who favour or even eager to cut interest rates are overjoyed, and presume that the central bank will immediately cut interest rates for the two time in a year, or even exclude that it will soon be reduced.

The stock market is on the rise at a rate of interest rate cuts. The Shanghai stock market has broken through 2500 points and 2600 points integer points in a week, hitting 2700 points. Shanghai and Shenzhen two cities are seven plus Yang, and daily turnover is over 600 billion.

Then, whether the central bank will cut interest rates or even reduce interest rates for the two time, perhaps last Thursday, the central bank held a nationwide teleconference on the national deposit insurance system within the system to study the deployment of the deposit insurance system in January next year, so that we can understand something from it.

Some people describe the current economic situation as "far more serious than the financial crisis", and even "deflation theory", "depression theory" and "hard landing theory".

However, the author has confidence in the Chinese economy throughout this year and is not surprised that such a "bad" economic indicator exists.

China's economy has entered a new normal.

Under the new normal, we must have a new normal thinking and thoroughly change the old normal through economic pformation, so as to reverse the traditional mode of economic growth.

It seems that in the face of the downward trend of the economy, the government has already prepared for it. In the 2011 government work report, it has set the space for the next five years of economic growth downward. For example, during the whole "12th Five-Year" period, if GDP can achieve an average annual growth rate of 7%, it will achieve a predetermined target.

However, the government allowed the economic growth rate to be downhill also conditional, that is, economic pformation is successful, quality and efficiency are improved, people's livelihood has been truly improved, and the economy can achieve sustainable development.

It can be seen that China's economy is still proceeding along the track set by the government.

Therefore, the downward trend of the current Chinese economy must be judged scientifically with a strategic vision and a new idea, so as to draw a relatively rational conclusion.

Just imagine how the economic consequences of China's economic operation and the economic and financial policy conclusions drawn from the economic downturn or even deflation and hard landing can be concluded with the economic operation results deduced from the economic pformation as well as the conclusions drawn from the economic and financial policies. The policy conclusions drawn by the former must be passive and conservative, that is, the overall reduction of interest rates should be reduced; the latter must be a positive conclusion, that is, relying on reform to push ahead.

I fully agree with positive and progressive policy recommendations.

Because the central bank's interest rate cut policy alone will not save the Chinese economy.

Not only in China, but after the financial crisis, the Fed, the European Central Bank and Japan's developed economies are relying solely on the interest rate cuts to save their own or regional economies from the mire of the crisis. Moreover, China's economic operation is generally benign, and there is no need for salvation at all.

In terms of interest rate cuts, the biggest benefits of this interest rate reduction are two points: first, to reduce the debt pressure of the local debt platform; secondly, to loan buyers, the credit environment will be more relaxed and the cost of mortgage loans will be reduced.

However, as a monetary policy tool, interest rate cuts, combined with other open market operations and SLO, SLF and MLF operations, comprehensively use various policy tools to guide the market interest rate downwards while reducing the total cost of social capital while maintaining adequate liquidity.

At the same time, we hope to rely on

It is also unrealistic to save the economy.

Some people believe that the logic of the central bank's reduction is: if the management adjusts the ratio of deposit to loan ratio or increases the elasticity of loan to deposit ratio index, if the interbank deposits of non savings financial institutions become general deposits, according to the current statutory reserve ratio, the commercial banks will have to raise 1 trillion and 500 billion yuan to 2 trillion yuan for the reserve fund, which will produce a liquidity tightening effect on the market.

Then, the central bank must hedge against this tightening effect.

But have you ever thought about it?

Even if the system and mechanism reform is not in place, who will guarantee that the liquidity released to commercial banks will go to the real economy voluntarily, and who can guarantee that these liquidity will not remain in the financial system or turn into such a hot stock market? If so, will it return to the traditional way of regulation and control? That is, the reduction of interest rates will be reduced, monetary easing, stock market rises, real estate prices rebound, asset price bubbles, and GDP will reverse upward and trigger inflation.

Therefore, if we want to really achieve steady growth, we must have a solid structure and promote pformation.

The success of China's economic pformation depends only on deepening the reform of the economic and financial system in an all-round way.

If everyone can think and understand this way of thinking, it will not be surprising for the central bank to cut interest rates announced in November 21st.

Because we should continue to push forward the reform of interest rate marketization, deepen financial reform in an all-round way, and strive to achieve new breakthroughs in the reform of key financial sectors and key links. This is the important task of the central bank set by the central bank this year.

For this year,

We have been trying to use the new tools of monetary policy.

In the two quarter, the standing credit facility (PSL) was introduced, and the medium-term loan facility (MLF) was introduced in the three quarter. In the fourth quarter, asymmetric interest rates were cut, and a series of new tools and policies were put into operation. However, the purpose has changed.

In October, the growth rate of China's broad money M2 was 12.6%, slightly lower than the annual target value, indicating that the central bank generally guided the market interest rate downward under the premise that the total amount of money was basically stable, hoping to achieve the purpose of total stability and structural optimization.

Now, at the end of the year, the most gratifying thing is that as a system guarantee for the smooth reform of interest rate marketization, the deposit insurance system will finally be officially launched in January of next year.

The deposit insurance system, together with the prudential supervision system of the financial supervision authorities and the arrangement of the lender of last resort of the central bank, is recognized as the three important defense line for financial security in the world.

Because after the full marketization of interest rates, the operating gap between banks will be widen, and the risk of banking industry will increase. In order to reduce the risk of run, we need to set up an effective deposit insurance system to protect the interests of depositors and maintain the stability of the financial industry.

At the same time, the successive entry of private banks will aggravate the competition of the banking industry, and objectively need to establish a deposit insurance system.

Moreover, the deposit insurance system can prevent a single banking crisis from spreading through herd behavior to the whole financial system, thus giving play to the role of financial stabilizer.

In my view, according to the current reform situation, the bankruptcy regulations of financial institutions may also be launched by the end of the year or early next year.

So, next, financial institutions should also make more articles on how to meet the opportunities and challenges faced by the further marketization of interest rates and the introduction of the deposit insurance system.