Regulators Expected to Target WMP Substitutes: Structured Deposits

Some banks may be disguising derivative products to get around regulations of WMPs.

iFeng: 结构性存款竟有“假结构”?据说监管层要动手了
he reporter from the China Securities Journal (ID: xhszzb) learned from a number of bank management personnel that due to the fact that some banks disguised structural deposits by “false structure” and “high interest rates,” the industry expects that false structured deposits will be in the industry. It is an open secret that regulatory policies on structured deposits will be introduced.

According to a correspondent from a certain bank to the China Securities Journal (ID: xhszzb), the company will begin to regulate part of the structured deposits business.

...Structured deposits, by definition, refer to the use of financial derivatives on the basis of ordinary deposits to link investment with interest rates, exchange rates, stock prices, commodity prices, credits, indices, and other financial or non-financial objects. Financial product.

Structured deposits belong to the bank's on-balance-sheet business, which is divided into two types: capital preservation and non-collateralization. The interest rate is usually between 4% and 4.7%. The China Securities Journal (ID: xhszzb) has learned that banks usually report structured deposits. Report together with the capital preservation management.

Structural deposits are not new in the country. However, after the introduction of new regulations on asset management, structural bank deposits are regarded as one of the substitutes for bank wealth management products because of the restrictions on bank off-balance-sheet businesses . Therefore, the scale continues to rise.
And derivatives never blow up...

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