What is included here?
- PBOC Found Interbank Business Violation in 40 Banks
- BONJ Plans to Raise up to Rmb14bn via Private Placement
- ABC AMC Subsidiary Received Approval from CBRC
- Dalian Machine Tools Saw Consecutive Bond Defaults
- China Liquidity Monitor – PBOC Injects Zero Net Liquidity via OMO into the Market for the 3rd Consecutive Day on Wednesday
(DB view) We think this is part of the on-going regulation tightening and financial deleveraging. Nevertheless, CBRC loosened the tone in May 2017 to grant another 4-6 months phase-in period for banks to correct incompliant transactions, and the tighter rules would be only imposed on incremental new businesses. We expect China’s financial deleveraging campaign to be orderly before the leadership transition. The campaign has already made progress by cutting off excess non-productive leverage, shortening the financing chains, and trimming shadow banking. We expect financial deleveraging to continue, resulting in elevated market rates and consistent regulatory tightening. This should drive up NIM for big banks and boost loan growth for them, while smaller banks could be forced to slow down asset expansion due to capital and regulatory pressure.
20170802-Deutsche Bank-China Financial Daily:PBOC Found Interbank Business Viol.pdf
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