7 Trillion Chinese Quantitative Easing Is A Misreading.

Recently, the central bank has launched a pilot project to refinance credit assets pledge.

The abolition of the loan to deposit ratio and the expansion of the credit assets pledge re loan were interpreted by some agencies as "7 trillion big water releases" and the Chinese quantitative easing. They were interpreted as a strong stimulus plan at the policy level.

In fact, this judgment lacks logical rigour. The so-called 7 trillion and Chinese QE do not exist.

But the central bank's intention to maintain a loose capital is logical.

There is a view that loose capital will not restore bank credit.

Nevertheless, unstable funds will deteriorate credit derivatives.

Considering the fact that there are many Pang's financing entities, the deterioration of credit derivatives will be the unbearable weight of the entity.

At present, the market risk preference has rebounded and the exchange rate has also stabilized. I believe that the interest rate of funds is expected to be stable in the short term. The medium and short term high level credit debt interest rate leverage pactions can continue. The adjustment of long interest rate debt every time due to market fluctuations is a good way to enter the market.

7 trillion the logic of credit measurement is derived from the deposit base multiplied by the deposit to loan ratio. For example, the maximum lending of 100 yuan deposits is 75 yuan in theory. Then, 100 trillion yuan of general deposit theory can put 7 trillion credit, and then this part of the money can enter the stock market and the real estate market.

However, it must be clear that the current credit restriction is not the ratio of deposit to loan.

Neither the overall financial institutions nor the listed banks have significantly exceeded the loan to deposit ratio.

The overall deposit and loan ratio of commercial banks is about 65.8%. According to the data disclosed in the semi annual report, only 76.88% of the listed banks only have a loan to deposit ratio of China Merchants Bank.

What really restricts bank credit is that the financing demand of the real economy and the risk preference of banks are not strong.

Restricting credit delivery at the physical level is the constraint of anti-corruption on local governments, the continuous downward trend of real estate investment and the pressure of manufacturing industry to capacity.

At the bank level, under the background of economic downward pressure and weak credit demand, banks' risk preference shrinks and their willingness to lend will weaken.

According to the theory of credit creation, there are deposits after loans, not deposits simply distributed to loans, bonds and liquid cash assets.

The bank's 100 yuan credit will be converted into a deposit of 100 yuan in the banking system, which will not narrow the gap between deposits and loans.

However, if foreign exchange is contracted, the strength of foreign exchange derived deposits will decrease. Under the established loan scale, it is possible to narrow the gap between deposits and loans.

For example, in 2012 ~2013, under the downward pressure of the economy, steady growth was intensified. Infrastructure investment and real estate stabilization brought a "weak recovery" to the economy, which created demand for bank credit.

In the background of the declining trend of foreign exchange derived deposits, the deposit loan ratio assessment has become one of the credit barriers in the table.

Banks at this time

Starting from off balance sheet innovation, starting from the liabilities side, we should take stock and deal with time points.

Therefore, the loan to deposit ratio relaxation essentially acts on the liabilities side of banks, which is still to smooth the fluctuation of market capital interest rates and has nothing to do with the "7 trillion big water releases".

Why do I disagree with the pledge of credit assets? Refinancing is the Chinese version of QE and "

This is because there is no need to implement QE at present.

The introduction of general quantitative easing needs two conditions:

One is in

At that time, a large number of liquidity disappeared and the interest rate of money market soared. The central bank needed to release liquidity to stabilize the fluctuation of money market interest rate, meet the liquidity gap of financial institutions, and prevent financial institutions from selling assets and lending entities.

Two, when the traditional tools were exhausted, such as Japan in 2012 and Europe in 2014, the benchmark interest rate basically dropped to 0, and there was no room for reserve ratio tools.

Despite the downward pressure on China's economy, there has been no risk of uncontrollable and traditional monetary instruments are not exhausted, and there will be no rush to enter quantitative easing.

Then, what is the policy intention of credit assets pledge reloan? First, as a new monetary supplement channel; two as a new monetary policy tool to coordinate steady growth and economic pformation; and the three is a stable capital interest rate.

But anyway, after the new exchange reform started in August 11th, the central bank's policy intention to stabilize the market capital interest rate is true through counter measures such as reverse repo, SLF, MLF, double down, deposit reserve assessment and credit pledge reloan.