New Perspective: Monetary Policy Should Avoid Excessive Stimulation.

　　 Four new trends need attention

First, general. deposit There has been a continuous decline, but fiscal and institutional deposits continue to grow, and the trend of structural change is obvious. From the data point of view, the total volume of deposits and Financial deposits of institutional groups is increasing. As of October this year, the amount of deposits of institutional groups amounted to 184154 billion yuan and Financial deposits amounted to 48141 billion yuan, accounting for 23 trillion and 230 billion of total deposits, accounting for 20.65% of all deposits. In particular, the deposits of institutional groups have always maintained growth momentum, and fiscal deposits have been above 3 trillion yuan this year. As stated in the report, with the huge amount of government debt and local debt outstanding, so many financial deposits are puzzling. If half of the financial and official group deposits are used to repay bank loans, not only will the assets and liabilities of the monetary authorities be reduced at the same time, it will also be beneficial to reducing government debts, releasing bank risks, enhancing financial strength and promoting the effectiveness of positive fiscal policies. In contrast to the foregoing, household deposits and non-financial corporate deposits (collectively known as "general deposits") continue to decline. Among them, household deposits for 4 consecutive months were lower than 50 trillion yuan in June, and the downward trend of non-financial enterprises deposits has taken shape. At the end of 10, general deposits totaled 85 trillion and 740 billion yuan, representing a decrease of 2 trillion and 790 billion yuan compared with the end of 6. This is also a drop in deposits in the fourth consecutive months. If this is still the case at the end of 12 this year, there is a need for high concern, which may imply a decline in the long-term savings rate.

Two, the decline in the scale of social financing is the key to the reduction of credit in the banking sector. The bank's actual credit continues to shrink. RMB loans increased year by year, and loans totaled 8 trillion and 230 billion yuan in the first half of October this year, an increase of 5.72% over the same period (in July), except for the year-on-year decrease in July. But if we consider the shadow banking, the social financing after deducting corporate bonds and stock financing, it will continue to decrease. In the past two years, with June 2013 as the watershed, the banking sector actually experienced a strong credit storm, but since July 2013, under the control of many regulatory policies, banks are actually slowly deleveraging. Especially since July of this year, entrusted loans have been significantly reduced, while non discount bills, trust loans and foreign currency loans have been negative for 4 consecutive months.

For further analysis, after the credit flood of 2009 and the beginning of April 2010, the central bank has amended the credit valve until August 2012. But after September 2012, credit again flooded. To a certain extent, the current real credit contraction is the continuation of previous adjustments. Taking into account the rapid growth of M2 in 2009, the author believes that the adjustment of the central bank is very correct.

Three, the real interest rate has dropped significantly. The interbank market interbank interest rate in October was 2.69%, which was 28 basis points and 48 basis points lower than those in September and August, and 16 basis points lower than June. Although the current interbank repo rate is still much higher than that in 2010, it is already 22 basis points lower than the average level in the past five years by 2.914%. On the one hand, with the central bank's directional reduction, short-term liquidity adjustment tools (SLO) and medium term lending convenience (MLF) and other policies, the central bank's desire to promote the long-term downward trend in interest rates has been reflected, and the market liquidity is very abundant. On the other hand, the double drop in real credit and interest rates of banks is still rare. Does this mean that the transmission of real economy and money market is not smooth, or is the structural contradiction of credit outstanding?

Four, the low growth trend of demand deposits continues. With the decline in the real credit of banks, M2 grew by only 12.6% in October, the lowest in 7 months, actually lower than the 13% target set at the beginning of the year. Perhaps more striking is M1, which grew by only 3.2% in October, up 1.6 and 5.7 percentage points lower than in September and the same period last year. It needs to be pointed out that the correlation between M1 and the stock market is very large. The stock market since July should have pulled up M1, but this rule has failed since the second half of the year.

　　 Monetary easing Difficult to solve structural problems

Is there any need for further monetary easing? Recently, with the slowdown in economic growth, the argument that further monetary easing policy should be implemented in 2015 is especially popular. In particular, some financial institutions, including foreign banks, believe that interest rates should be cut 4 times and 2 times in 2015. The author thinks that from the perspective of money marketization, it is correct to use price control and quantity regulation. However, it is worth pondering if we try to stimulate monetary policy by loosening monetary policy. The fundamental problem at present is not the lack of money in the market, but the prominent structural contradiction in credit. Under such circumstances, even if the 2009-2010 year's extreme easing policy is adopted, even if the one or two quarter GDP can be pulled up, the outlook may still be rather bleak. The thorough solution of economic structural problems is difficult to solve by currency drainage.

In addition, interest rate cuts should be considered in the international economic environment. Although the euro zone and Japan are continuing to increase their easing efforts, the Fed's interest rate hike has been formed (at the end of next year or the end of next year). Under such circumstances, unless the risk of stall is stalled in China, the consequences of this comprehensive stimulus policy will be very serious.

The continuous negative growth of PPI indicates that the industrial economy is in recession. This can also be reflected in the industrial growth rate of less than 8% in October. But a large reason is the failure of the investment driven economic growth mode in the past. Facts have proved that the development mode of heavy chemical industry can only be applied to the primary stage. For banks, it is not that they do not want to lend, but that the qualified lending enterprises are short of resources, which is almost irrelevant to the loan interest rate.

　　 Greater transparency capital To open up

For the evolution of domestic monetary policy, the author suggests that monetary policy transparency should be increased in the future. With the change of international economic situation, many major economies have adopted an unprecedented radical monetary policy, especially the Federal Reserve QE. But the QE policy in the United States is very transparent, and the amount of money, what to buy and the beneficiaries are widely advertised. But the market for China's monetary policy is often known from the "rumors of rivers and lakes". The author believes that the central bank can be kept confidential before the actual action, but after several days of work, it should inform the public in a certain way and guide market expectations to be open. Markets hate uncertainty, and markets cannot always live on speculative policies. The author suggests that the internationalization and independence of the central bank can start with transparency.

The management of monetary policy should be shifted from orientation to universal benefit. This year, many directional monetary easing has been carried out this year, but the policy of having a comprehensive impact on the money market is still well regulated by the GSP. For example, if the central bank wants to increase liquidity, can it take public auctions in the market or buy treasury bonds in the interbank market? If the central bank wishes to support small and medium enterprises, does it make a system to make all eligible commercial banks active? When the amount of bad assets is written off, a clear system is adopted to restrict it, but the specific number is determined by the commercial banks themselves.

It is suggested that the central bank further promote financial liberalization. At present, the most obvious move is the Shanghai and Hong Kong links, which obviously opened the door of capital account liberalization. Although it was still a door in the initial stage, it still has the historic significance of milestone. Although there is still much uncertainty about whether China's stock market can be included in the MSCI international index next year, it is crucial to understand the extent to which foreign capital can enter and leave China's capital market. It is suggested that the central bank study and propose clear policy ideas as soon as possible to promote the internationalization of China's stock market.

In short, deleveraging monetary policy is appropriate at present, which is beneficial to appropriately squeeze out the past money bubbles. At present, the market interest rate is moderate, and when the risk of sudden economic stall is small, excessive stimulus policy should be cautious. In addition, the decline of ordinary deposits is the promotion of residents' financial management consciousness, and is also the embodiment of interest rate marketization.