Recently, some media reported that the China Banking and Insurance Regulatory Commission recently convened a meeting of some bank wealth management subsidiaries, and proposed to require relevant bank wealth management subsidiaries to reduce the proportion of cash management wealth management products in the total product scale to 40% by the end of this year, and to decrease to 40% by the end of next year. 30%; and the scale will be reduced to less than 200 times the month-end balance of its risk reserve or less than 30 times the scale of its own funds by the end of next year.
On October 15, a person from a wealth management subsidiary of a large state-owned bank confirmed the news to the news reporter and said that the bank’s cash management wealth management products are currently in a safe proportion. Less pressure. Another senior executive of a wealth management subsidiary of a city commercial bank told the news that it is understood that some bank wealth management subsidiaries account for a relatively high proportion of currencies. Regulatory regulations will have a certain impact on bank wealth management subsidiaries that initially intend to use currency to scale up. This means that everyone has a ceiling, and banks must speed up the withdrawal of their own capital and risk funds. The current proportion of cash management financial products in which it belongs is lower than the regulatory standard, and it is less affected by this policy, and there is a certain amount of money that can be increased.
Cash management products refer to wealth management products of commercial banks or bank wealth management subsidiaries that only invest in money market instruments and can subscribe and redeem product shares on each trading day . Similar to money market funds, cash management products are publicly issued to the unspecified public, allowing investors to subscribe and redeem daily, which is likely to cause liquidity risks due to large-scale centralized redemptions, and risk spillovers are strong.
The team of Wang Yifeng, chief analyst of the financial industry of Everbright Securities, believes that the policy’s continued pressure on cash-based wealth management is mainly based on the following considerations: cash-based wealth management “asset pool” business accounts for Too large a ratio is not conducive to the building of real asset management capabilities of banks; the “points” of the cash-based wealth management “current-like” yield curve are too high, pushing up the cost of liabilities in the banking system and increasing the opportunity cost of long-term capital supply; an excessively large proportion of cash Increase the difficulty of liquidity risk management.
For the possible impact of policy pressure reduction on cash products, Wang Yifeng’s team stated that in the process of pressure reduction, the stock of non-compliant assets (mainly credit debt ), or reduce the allocation of qualified assets; the pressure of cash products drops, and some customers may transfer to money market funds, fixed income +, or fixed-open products, and products with the shortest holding period. Short-term fixed-opening or daily redemption products after the shortest holding period may be developed as a result, which will promote the reduction of the use of amortized cost method. The “disintermediation” of bank balance sheet funds has slowed down, reducing the difficulty of controlling the cost of liabilities in the banking system.
“In summary, this policy has an impact on the prices of credit bonds, ABS or NCD, and has an impact on the profitability of the banking system.The impact on profitability is small, and stock investment is indirectly affected. “Wang Yifeng said.
Sun Haibo of the Financial Supervision Research Institute pointed out that the requirements of this meeting almost fully meet the requirements of the new cash management regulations, but it is re-emphasized. In terms of the size of the cash management products of domestic banks, it is generally more difficult to meet the standards. Most banks will be pressured to drop to 30% of the prime minister’s wealth before the end of next year. There is not much pressure, but due to the accounting valuation requirements of the Ministry of Finance The restrictions on the use of the amortized cost method have led to some banks’ denominators may also shrink slightly in the next year.
Sun Haibo believes that “the denominator will be reduced by the end of next year. Its risk reserve is less than 200 times the month-end balance”, which will also cause certain pressure on banks.