China's surge in secrecy bill financing

 China's surge in secrecy bill financing (not reproduced)
1   broke the 1.62 trillion of new credit, the amount of days, the loan structure changes, in particular notes the proportion of financing and the proliferation of short-term loans to become parties to focus, show behind the staggering number of some of the credit data of water. the last two months of 2008, new loans, 430 billion bill financing, in January 2009 increased 623.9 billion yuan bill financing, accounting for 1.5 trillion yuan of total non- 41.6% of finance company loans, if coupled with short-term loans, accounting for 65% more, long-term loans accounted for only 35%.
the amount of such days, the number of loans in the end into the real economy, how many remain in China inefficient financial system credit funds of RMB 660 billion yuan has been fixed deposits or for companies to switch to buy shares.
Although this is the official secrecy, and even central bank officials have come out even behind the bill financing is reasonable, say should be of choice. repurchase operations, the amount of repurchase up to 1200 billion yuan, 2.4 times the previous operation; the usual behavior may contain a write-off another layer of meaning. because the traditional open market is usually used both 7 and 28 days species to regulate short-term liquidity of the retractable, it is clear that regulation designed to curb rapid months of bill financing, and the average duration of bill financing is generally 3 to 4 months.
due to the recent cost of capital, combined with fierce competition , current bank bill discount rate has been below its cost of capital, including direct attached and Links, including the bill discount market interest rates have been generally less than 1.5%, in some places such as Guangdong and even ultra-low rate of 1.2%, and 3 month and 6-month deposit rate of bank officials in sharp upside down, companies can discount the interest rate and policy interest rates in the case upside down, from risk-free arbitrage. If the market continues to increase public funding of the mills of this period efforts will drive the price level must increase funding. Once the discount rate back to the top of the bank cost of funds, will effectively inhibit the arbitrage business, squeeze the bubble in the bill financing.
also noteworthy may be the instrument by the asset number of effects. If the bank draft issued by a deposit of 30%, 30% of the enterprises to get 100% of the amount of margin notes, and collection companies to 100% discount and then deposit a greater proportion of the amount to the banks for the amount of notes , and so on, notes the size of the financing is easy to undoubtedly pose some potential risks.
was dubbed beat around the bush in, under the current regulatory system which is always found to be unsubstantiated, because regulators can not determine which part of the flow of corporate funds from profits, which part of the financing from the bill.
course, the recent period financing instruments are many reasons for the surge. The current corporate capital chain tension, such as short-term loans continued to bill financing to supplement working capital, meet their urgent needs, compared with the same gap between short-term loans to large enterprises through notes the cost of borrowing is low, active high . In addition, traditional financing instruments are regarded as China's banks to adjust the size of loans to an important tool, and its expected performance of a situation. the bigger bills, at least to ensure that banks can not reduce the stock of lending money. so the current bank notes is quite big, monetary authorities to regain control of credit lines, the bank can keep the Bills Rediscount out. And when the economic situation has improved, the bank notes the release of funds into the long-term loans can be guaranteed to continue the pace of expansion.