[Bad written] notes financial market infrastructure

Chapter Two: China's financial system

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definition

• Bank lending (Inter bank offered credit) refers to financial intermediation between banks each other. In general are short-term, often by today, but also tomorrow. Interbank market first appeared in the United States. The root cause of its formation is that the implementation of the statutory deposit reserve system.

• What is shadow banking ? Broadly speaking divided into two categories: first, not within the scope of banking supervision, but the bank doing things, to put corporate loans. Mainly because some financial institutions such as trust companies, insurance companies, asset management companies; the second is that some commercial banks uneasy dutiful, through a number of non-banking institutions, not to do things within a number of bank credit business, that is, shadow credit banks. Because the demand is there, there are some companies (overcapacity companies, real estate developers, PPP projects, etc.) get loans through formal channels, less than financial capital, can only be obtained through the shadow banking. The difference between the shadow banking commercial bank credit and business credit itself that: shadow banking credit not recorded in the bank's balance sheet inside.

• Reserve : deposit-taking financial institutions required to pay a certain percentage of gold to the central bank must be ready, usually depository institutions (commercial banks) will keep more deposits, called "excess reserves"

• Money Multiplier : Because of the reserve, the banks unlimited loans and deposits, the largest amount of deposits to be created:

  $m=\frac{1}{r}$

  Explanation: A release of the loan (1-r) D, all the money into B, B can release the money $(1-r)^2 D$put the loan into A, and so on, loan records out of thin air and create maximum value for the D / r. As the excess reserve ratio (e) and customers for unsaved © exists, the formula is revised

  $m=\frac{c+1}{c+r+e}$

• Monetary policy tools:

  • Reserve
  • Rediscount policy: central bank lending rate to commercial banks.
  • Open Market Operations: Central Bank of publicly traded securities in the stock market, if (withdraw base money) selling securities, it causes the money supply to decline.
    • Repo: repurchase and reverse repurchase, the repurchase is to sell securities to the primary market, and then buy back the securities in the future, we repurchase operations to recover from the market liquidity of the central bank. Reverse repurchase refers to the central bank to buy securities to primary dealers, brokers and re-selling acts in the future.
    • Issuing central bank bills, to achieve relatively short-term capital returns

information

• China is the largest gold consumer and producer countries
• China's Zhengzhou Futures Exchange (1990), Shanghai and Dalian Futures Exchange
• Shanghai Stock Exchange, established in 1990, the Shenzhen Stock Exchange for the 91 years, the first stock issued in 1984, "Leap impression"
• Share reform was completed in 2005, the equity division
• 2018 People's Bank of China Governor Yi Gang:
  • Securities companies, fund management companies, limit foreign ownership of futures companies to relax the 51%
  • Mainland and Hong Kong stock interoperability expand to four times daily quota
  • Open for Shanghai and London through the year 2018
  • 2019 plans to cancel the shares mentioned restrictions on foreign ownership policy in 2020
• In 2006 China Financial Futures Exchange was established, becoming the first financial derivatives exchange. February 9, 2015, the first card on the field of financial options 50ETF then Shanghai Stock Exchange.
• China's financial market regulatory system: a Committee of his party two sessions:
  • Financial Stability Development Committee of the State Council
  • People's Bank of China
  • Oh Securities Regulatory Commission; China Insurance Regulatory Commission Bank: Bank of China Insurance Regulatory Commission, to find each annual statistical reports on the insurance industry. http://www.cbirc.gov.cn/cn/view/pages/index/index.html

event:

• June 2013 occurred "money shortage" , interbank lending rates of banks explosion is high, the Bank of China, China Everbright Bank appear appropriate defaults, the stock market crash, every June is a high incidence of the shortage of money in January, 2013, for example, the Shanghai index from 2334.34 -> 1849.65 in just a month's time
• March 17, 2018 the National People's Congress China Banking Regulatory Commission and China Insurance Regulatory Commission merger, it is important to prepare a draft banking insurance laws and regulations and the basic system of prudential supervision responsibilities allocated to the People's Bank of China