Why did the credit not increase but decrease after the reserve requirement ratio was cut? Researcher of the Institute of Finance of the Chinese Academy of Social Sciences
Due to the changes in the domestic bank credit growth model, viewing the current loan behavior of domestic banks from an experiential perspective can only see the surface. In 2012, the behavioral pattern of domestic banks is undergoing significant changes, which is a new perspective for re-understanding the current domestic banking market.
After the central bank's two cuts in the deposit reserve ratio, the lendable funds of domestic banks increased by nearly 800 billion yuan. However, according to the situation in January this year, instead of increasing, the credit growth decreased by 288.2 billion yuan. I analyzed that this may be related to two issues. One is related to the monetary policy target. The macro-control target of the central bank's monetary policy in 2012 is to allow money and credit growth to return to normal. The second is related to the significant changes in the behavior mode of banks since 2011.
Under the existing evaluation mechanism, there was a dominant idea in the loans of domestic banks several years ago: under a given credit scale, they often adopted the way of early loans and early benefits, meaning that credits occurred at the beginning of the year, and profits could be guaranteed by the end of the year.
With the tightening of domestic credit scale in 2011, under the circumstances of limited credit scale and lower limit management of loan interest rates, the later it was, the higher the bank loan interest rate would be, and the higher the bank's profit level would be. Therefore, December 2011 became one of the months with faster credit growth that year. However, the high growth of bank credit in January 2012 as expected by the market did not happen.
The central bank's reduction of the reserve requirement ratio appears to be a signal of relaxation, but whether this signal can be converted into increased financing remains uncertain, which largely depends on the choice of commercial banks. Moreover, banks are currently exploring new credit models and gradually changing the credit allocation structure, such as increasing financing for small and medium-sized enterprises, agricultural-related enterprises, agriculture, and affordable housing.
Due to the changes in the domestic bank credit growth model, looking at the current loan behavior of domestic banks from an experiential perspective can only see the surface. In 2012, the behavioral patterns of domestic banks are undergoing significant changes, which is a new angle for us to re-understand the current domestic banking market.