Today Was Relax Day for Chinese Banks

The last three quarter ends have produced cash crunches; September's was hidden by central bank preventative action, but the size of the intervention was on par with June and December. Bulls will say the worst is past; I predict we'll see it again possibly as early as February when Chinese New Year hits, more likely in March at the end of Q1.

Bank's Bitter Month at Year End
Today is the first working day of 2014, but for the domestic banks, large and small branch president who, it is really able to relax in the day because starting today their "red point" action finally come to an end. Beijing Youth Daily reporter learned that, in order to make it better at the end of the report, a state-owned big firms recently negotiated deposit interest rate has reached a level of 8%, while some small banks give to 9-10%.

Fund "on behalf of small savers" to negotiate terms with the bank

IT company to work on the balance of Bao Xiao Wu is a big fan of those days, he found himself PayPal account balance at the end of last year, the daily income increased a lot. In fact, the day 弘增利 treasure currency and the "balance of treasure" 7-year yield at the end of five consecutive days remained above 6% in the last year, the last day of the 7th annual yield of 6.696% has been reached.

Analysts pointed out that the recent market funds face tensions will continue until 2014 before the Spring Festival, the IMF are expected to maintain a higher yield level, the end of the investment phase of the Fund can share a high income. For Xiao Wu, who, they largely results from high-yield fund with the bank negotiations.

Insiders told the Beijing Youth Daily reporter, in recent days, a substantial increase in deposit rates for the agreement of large deposits, many funds are now talking about the condition of the bank, hoping to get a more favorable agreement deposit rates. BYD reporter learned that a state accusing him of recent agreements have to actually deposit rates by 8% level, and some small banks give to 9-10%.

100,000 dollars earn 101 yuan a night

In week two of the last trading day of 2013, the reverse repo rate exchange bonds fluctuate significantly. Overnight Treasury repo rate highest bid and lowest offer the Shanghai Stock Exchange and the Shenzhen Stock Exchange difference a few times.

This thrilling turbulent market has staged on Monday. One day reverse repurchase bonds shot up to 37 percent in intraday trading, but closed in the subsequent half-hour avalanche fell, or a maximum of about 77% in the fall to become 64% last close at 7.16 percent. Shenzhen overnight repo rate is also finished lower, one day suddenly pulled up sharply reverse repurchase bonds rose sharply from 15% to 25%. If investors traded at 37% level, 10 million dollars will be able to earn 101 yuan a night.

Market participants pointed out that in recent days Exchange intraday abnormal rise in the repo rate, the main point affected by factors such as, two days actually melt out of the funds should go to overnight after January 2, 2014 can turn out the equivalent of a New Year's Eve capital financing. Since the end of banking institutions and venture capital occupancy factors, the basic pledge not to accept credit debt financing, non-bank institutions can only turn to the exchange financing, money supply in the venue itself is relatively limited, exacerbated exchange market funds are tight.

Banks want to look better Statements December 31 of

Reverse repurchase bonds equivalent to investors in accordance with the agreed interest rates to lend money to people who hold government bonds. Each other to exchange the bonds secured by the exchange brokered transactions, so basically no risk. Treasury reverse repo sounds complicated, but as long as there is a securities account of the investors can participate, but time is very important. Every end of the month, end of the quarter, year-end, higher interest rates banks are pulling prescribe short-term deposits. This time, the national debt will follow the reverse repo rate rose.

In fact, the banks in order to punch December 31, 2013 this point, has been ahead of the end of November or early December to start fighting. Ordinary savers who feel the most obvious is to improve the short-term expected rate of return financial products New Year's Eve, is currently expected annual yield of more than 6.5% of the financial products abound, even in the capital of workers and peasants hesitate to issue, but they are generally in a period a couple of months.

Over the years, the assessment of commercial banks is carried out around the point, banks want to Dec. 31 report that day, deposit size, loan size and other indicators look great.

"Red point" is difficult to reverse banking culture

"De assessment tired like everyone crying, laughing together fight to end of the quarter point shots photo, and then cried tired to continue," the person in charge of a state-owned big firms once described "red point" "I do not think that point what significance, only that people like to see the report of photos rather than the movie: Because the photo is a moment of static performance of the bank's assessment that point in time, and the film reflects a time of joy, anger dirge, like the daily dynamic assessment. "

BYD reporter learned that, beginning in 2009, the CBRC has repeatedly called on commercial banks to strengthen positions in management, optimize the structure of assets and liabilities, contain "red point" imprudent behavior, strengthening the monthly average daily indicators for monitoring. In recent years, many banks also improved assessment methods, but because of "red point" is a long-established banking culture, indeed a number of objective indicators to measure time point, it is difficult to completely reverse the short term.

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