On April 7, 2024, the central bank announced the establishment of a re-loan for scientific and technological innovation and technological transformation.
The quota is 500 billion yuan!
Shall we start from the beginning?
You don't look at the banks and look at the money, but there are times when there is a lack of money
For example, when a bank lends out most of its money, it will not be recovered for a while, but suddenly depositors will gather to withdraw the money......
In this case, we call it a "run", and the bank needs to borrow money from everywhere
As a result, the majestic figure of the central bank appeared!
Therefore, the central bank is called the "lender of last resort", that is, when the bank is short of money and needs to lend, the central bank will choose to intervene.
The central mother lends money to the bank, which is generally divided into 2 types
What's the difference between the two?
We ordinary people go to the bank for loans, which can be divided into credit loans and mortgage loans, the credit cards we swipe belong to credit loans, and housing loans belong to mortgage loans
So what is the nature of the central bank's relending?
/ Rediscount / Rediscount is similar to a mortgage,
It's just that this collateral is generally commercial paper
We have talked about the knowledge of bills and discounting before, and we want to see it here: bills
Discount refers to the meaning of the holder to transfer the bill to others by paying a certain interest before the maturity of the bill.
The unexpired bills obtained by the bank through discounting can also be transferred to the central bank to obtain the cash paid by the central bank, which we call "rediscounting".
It can be seen that rediscount is one of the forms of lending by the central bank to commercial banks, and it is also one of the important means for the central bank to implement monetary policy.
By adjusting the rediscount rate, the central bank will affect the cost of borrowed funds from banks, and ultimately the total money supply in the market
Re-lending is the abbreviation of central bank loans, which refers to loans from central banks to financial institutions such as banks
In the early days, refinancing was a line of credit and did not require collateral, but later it gradually required high-quality loans or bonds as collateral.
Relending is also an important monetary policy tool of the central bank, which can reasonably guide the flow of funds and the direction of credit.
Broadly speaking, innovative liquidity instruments such as MLFs and SLFs, which we have talked about before, can also be counted as refinancing.
Let's make a simple classification of refinancing:
The 500 billion re-loan issued by the central bank this time belongs to the re-lending of scientific and technological innovation and technological transformation, which is the continuation of the policy of re-lending for scientific and technological innovation and special re-lending for equipment renovation and transformation.
The reloans were granted to 21 financial institutions, including China Development Bank, policy banks, state-owned commercial banks, Postal Savings Bank of China, and joint-stock commercial banks
At their own risk, these banks make their own decisions on whether to issue loans and the conditions under which they will issue loans, based on the application of the enterprises.
This refinancing interest rate is 1.75%, which is low-cost funding, and the loan term is 1 year
However, the amount of re-lending by the central bank is not equal to the amount of loans issued by banks to enterprises.
The central bank will review the loan ledger and issue re-loans to the bank at 60% of the loan principal for loans that meet the requirements in the list of alternative enterprises or projects.
This is mainly from the perspective of risk, because the bank itself needs to contribute 40%, it will be more prudent when making its own decisions to lend, reducing moral hazard.
In short, the central bank's 500 billion yuan re-lending provides financial institutions with low-cost stable funds, which will help guide financial institutions to increase support services for scientific and technological innovation and technology-based enterprises.
Well, that's all for today.
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