Financial Institutions Are Punished For Their Leveraged Capital Misallocation. Does The Central Bank Start To Amplify Its Moves?

China's financial institutions have increased leverage recklessly, and illegally used the deadline mismatch to seek huge profits. When things go wrong, they begin to kneel down to her. She always responds to requests, which encourages some institutions' bad behaviors and brings huge risks to China's finance. If there are benefits for her, there are risks for her. The world cannot always be such a good thing, This time, Yang Ma is determined to educate and punish these disobedient children, and let them have a long memory. Don't always kneel down to ask for the care of Yang Ma, and be responsible for your own behavior. It is impossible to always seek huge benefits by walking a tightrope. Because leverage is nested layer by layer and term mismatch contains huge risks, the financial institutions cannot be in awe if she cares only. Recently, the vice chairman of the CIRC warned that there are term mismatch and liquidity risks among the six major financial risks in China. The risk of asset liability mismatch is that some financial institutions have greatly increased the degree of asset liability mismatch by taking channels, increasing leverage and other ways, Artificially increased the risk of short money, long money and short allocation in the financial market. Some financial institutions deviated from their main business, operated aggressively, did not pay attention to the rational allocation of assets and liabilities, and even misappropriated funds, which may eventually lead to liquidity risks. Although the chairman of the CIRC mainly targeted insurance institutions, it did not rule out targeting other financial institution 。

Since the end of March, due to the increased pressure on the bank's MPA (macro prudential assessment system) assessment, the severity of supervision superimposed on anecdotal rumors has exceeded the past, Everbright Securities' convertible bonds have frozen hundreds of billions of yuan of funds, 1762 batches of interbank certificates of deposit, totaling 1.59 trillion yuan due, and many other factors, the market capital interest rate has started to rise in an all-round way. In order to survive, Some radical banks are desperately issuing interbank deposit receipts. The interbank deposit interest rate has kept rising, breaking the 4.5% high and approaching the 5% high. Some even reached the surprising high of 7%. The scale has continued to expand. In March, interbank deposit receipts issued 1.05 trillion yuan. The face value issued in March accounted for more than 50% of all bonds issued in the same period. The interest rate of wealth management funds again exceeded the 5% high, Although banks and other financial institutions were looking for money everywhere, by March 20, the capital level continued to be extremely tight, which still caught many institutions off guard. Indeed, big banks not only failed to raise funds, but also raised funds aggressively. The central bank did not delay trading time, nor inject liquidity. The media quoted traders as saying, "Too terrible!"! After borrowing for one day, there are still many defaults! "

The subject of this breach is agricultural commercial banks and a small number of urban commercial banks rather than non bank financial institutions, which are much more seriously injured than non bank financial institutions. This is mainly because the non bank financial institutions experienced the pain of radical investment last time, and there was a typical default event of Guohai Securities. What these small Dingding financial institutions lack most is the risk control mechanism, It was not hit hard by the last round of leverage, and its investment behavior was more radical. This time, it finally tasted the iron hearted side of the central bank. Under the MPA assessment of the central bank, it tasted the consequences of default under the radical style. After the default event on Monday, the central bank was determined to raise the interest rate of funds again. On the 21st, it only injected 40 billion yuan of funds, but the interest rate of funds was still high. The tight situation of funds still remained unchanged. Some small banks were forced to break the SLF ceiling directly and beg for funds on their knees, 9.5% was killed overnight in the morning. On the 21st, many banking institutions could not control SLF prices in order to avoid breaching the price limit. In addition, the SLF process was too long and the amount was too small. Far water could not save the near fire. On the 21st, they also continued to break the price limit.

For ordinary people, these boring figures are a headache and boring, but for financial institutions, they are wealth and astronomical profit gains and losses. The author estimates that the traders' hearts will be broken when they see those figures continue to jump up, but the central bank is still calm. It seems that the central bank intended to do it this time. In response to the Federal Reserve's interest rate increase, easing the pressure of RMB depreciation, reducing capital outflows, and in order to deleverage financial institutions to reduce capital maturity mismatch and reduce financial risks, the Central Bank has continued to withdraw liquidity and reduce the supply of base currency. However, some radical financial institutions still ignore the trend of the Central Bank and continue to implement radical investment strategies, It is very necessary for Yang Ma to give appropriate punishment. If they are always caring, they will give money to the children if they are difficult to help. The children will never grow up, and China's financial risks will never be eliminated.

In fact, in order to coordinate with the central bank's tightening of money de-leveraging China Securities Depository and Clearing Co., Ltd. plans to raise the rating of pledged bonds to AAA, and bonds rated AA+and below will not be able to be warehoused for pledge, which is planned to be implemented from April 7, citing insiders. People familiar with the matter said that the new rules proposed to cut off the old from the new, and the existing bonds would not be affected temporarily. This means that the financing of financial institutions will again be greatly restricted. After the central bank and the central bank set the monetary policy to be stable and neutral, the central bank began to reduce the base money supply, recover liquidity, and improve public operations twice Fund interest rate 10 basis points each, and make more regulations on inter-bank business of wealth management funds. Financial institutions that rely heavily on inter-bank business should adjust their business as soon as possible to prevent the rolling of the liability side from becoming larger and more difficult, and guard against risks.

This time, the central bank just gave a little punishment and opened the monetary gate. The media reported that the central bank injected hundreds of billions of yuan of liquidity in the afternoon of the 21st, and it may not be easy to get financial institutions through the difficulties next time, Financial institutions should also keep in mind the warning of Yang Ma, gradually reduce leverage, gradually change the maturity mismatch of funds, pay attention to the debt structure, and pay attention to the health of cash flow. They should not continue to ignore the warning of Yang Ma, go their own way, and increase leverage. Regardless of the depletion of cash flow, this will not only bring incalculable losses to themselves, but also bring huge hidden dangers to China's finance. Value China's financial market volatility was repaired yesterday, and the central bank immediately stopped injecting liquidity and began to recover 30 billion yuan of liquidity. The environment faced by China's capital market in 17 years is that monetary policy will gradually become stable and neutral and IPO normalization. The author believes that we should not place too much hope on the bull market, focusing on the bull market.

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