Securities Times reporter Sun Lulu

  Following the remarkable progress made in the market-oriented reform of loan interest rates, the market-oriented reform of deposit interest rates has been advancing rapidly since last year.

The central bank recently disclosed in its first quarter monetary policy report that in April this year, the central bank guided the interest rate self-discipline mechanism to establish a market-oriented adjustment mechanism for deposit interest rates. The loan market interest rate represented by the term LPR, and the deposit interest rate level is adjusted reasonably.

This is another major adjustment to the self-discipline pricing mechanism of deposit interest rates after the deposit rate self-discipline ceiling was formed by multiplying the deposit benchmark interest rate by a certain multiple in June last year, and then added a certain basis point.

  The 10-year treasury bond yield and 1-year LPR are both market interest rates, and their changes are more frequent than the deposit benchmark interest rate, which can more timely and accurately reflect the changes in the supply and demand of market funds.

The central bank encourages banks to adjust deposit interest rate quotations in a timely manner with reference to these two market interest rates, which is not only to provide a new "anchor" for reference in the pricing of bank deposit interest rates in the process of steadily promoting the marketization of deposit interest rates, but also to guide banks' asset-side and liability-side pricing. The key is to deepen the interest rate transmission mechanism through which asset pricing drives debt pricing.

  The reason why this reform of the self-disciplined pricing mechanism for deposit interest rates is conducive to promoting the integration of pricing on the asset side and the liability side is that the current new loan interest rates have basically been priced with reference to LPR, and LPR, as a "bridge" connecting the central bank's policy interest rate and bank loan interest rates, has its own Pricing is driven by changes in policy interest rates, which in turn affect the pricing of loan interest rates.

In the future, the bank deposit interest rate will also be priced with reference to LPR, which is equivalent to opening a new road at the other end of the "bridge" of LPR, so that one end of the LPR is connected to the policy interest rate, and the other end is connected to the deposit and loan interest rate.

And deepen the two-way influence of LPR and deposit interest rates, the decline of deposit interest rates will also save the power for LPR to reduce, and the probability of LPR quotation reduction this month is increasing.

  There may be two considerations as to why the deposit rate will still refer to the change in the yield of the 10-year treasury bond.

On the one hand, from the perspective of the composition of bank assets, in addition to loan assets, bond investment assets also account for a large proportion. The former is mainly priced with reference to LPR, and the latter is priced based on the 10-year treasury bond yield.

On the other hand, from the overall perspective of interest rate marketization, the 10-year Treasury bond yield is the basis for the pricing of various market interest rates and an important factor for policy interest rate adjustment. The introduction of the 10-year Treasury bond yield can consolidate the “market interest rate + The central bank guides the interest rate market-oriented transmission mechanism of “LPR-deposit and loan interest rates” to improve the transmission efficiency of monetary policy.

  From a more urgent short-term practical consideration, adjusting the deposit interest rate self-discipline pricing mechanism at this time can play a role in driving down bank deposit interest rates and reducing the cost of bank liabilities.

The reduction in the cost of bank liabilities can, in turn, reduce the LPR, and at the same time promote the decline in loan interest rates, while maintaining the stability of bank interest margins, thereby enhancing the ability and willingness of banks to increase credit supply to the real economy.

This is similar to the effect of the central bank's direct interest rate cut, but the guidance for banks is more flexible and market-oriented, and it can take into account internal and external balance under the accelerated tightening of monetary policies in major developed economies.

Keywords: