In layman's terms, a loan is when you borrow money from a bank.

Discounting refers to the behavior that the holder of a forward bill transfers it in the discount market after acceptance and before the bill expires, and the transferee pays the money to the transferor after deducting the discount interest, or the bank purchases the unexpired bill.

Second, what do you mean by refinancing and rediscounting?

Re-loan refers to the loan issued by the central bank to commercial banks. According to Article 8 of the Interim Measures for the Administration of Loans to Financial Institutions of the People's Bank of China, loans to financial institutions by the People's Bank of China are divided into credit loans and rediscount.

Rediscussion is the behavior that the central bank provides financing support to commercial banks by purchasing discounted but not yet expired commercial bills held by commercial banks.

China's refinancing has two meanings. Refinancing in a narrow sense refers to the general term for central bank loans to financial institutions. Broadly speaking, refinancing refers to the concept of refinancing, including bill rediscount. However, as one of the traditional tools of monetary policy, rediscount should be excluded from the scope of refinancing.

The role of re-lending: By adjusting the interest rate of re-lending, the central bank affects the cost and availability of credit funds obtained by commercial banks from the central bank and changes the money supply and market interest rate.

Function of rediscount: As one of the three traditional monetary policy tools of western central banks (open market business, rediscount and deposit reserve), rediscount has been widely used in many countries, especially after World War II, and has been successfully applied to the economic reconstruction of Japan, Germany, South Korea and other countries.

The nature of refinancing: it is a quantitative monetary policy tool with strong planning, which is administrative and passive.

Rediscount nature: As the draft is a bill that the buyer's bank promises to pay unconditionally, the seller's bank is willing to accept the draft in order to provide its customers with the required funds in time.

What do you mean by refinancing and rediscounting?

Re-lending refers to the loans issued by the central bank to financial institutions to achieve the monetary policy objectives, and rediscounting refers to the financial institutions such as commercial banks discounting unexpired bills to the central bank to obtain financing. There are three differences between rediscount and refinancing: their essence is different: the essence of rediscount: rediscount is the behavior that the central bank provides financing support to commercial banks by purchasing discounted but unexpired commercial bills held by commercial banks. First, the essence of refinancing: refinancing refers to the loans issued by the central bank to financial institutions to achieve the monetary policy objectives. China's refinancing has two meanings. Refinancing in a narrow sense refers to the general term for central bank loans to financial institutions. Broadly speaking, refinancing refers to the concept of refinancing, including bill rediscount. The roles of the two are different: Second, the role of rediscount: As one of the three traditional monetary policy tools of western central banks (open market business, rediscount and deposit reserve), rediscount has been widely used in many countries, especially after the Second World War, rediscount has been successfully applied to the economic reconstruction of Japan, Germany, South Korea and other countries. The reason why rediscount can get such attention and application is that it not only affects the credit expansion of commercial banks and regulates the total money supply, but also can selectively finance different kinds of bills according to the requirements of national industrial policies and promote the adjustment of economic structure. The central bank can adjust the refinancing rate, which affects the cost and availability of credit funds obtained by commercial banks from the central bank and changes the money supply and market interest rate. For example, when the central bank wants to tighten monetary policy, it can raise the refinancing rate, reduce the amount of base money, increase the loan cost of commercial banks to the central bank, and curb the loans of commercial banks to the central bank. The adjustment of refinancing interest rate is an effective way for the central bank to publicize the changes of monetary policy to commercial banks and the society, which can have a forecasting effect and thus affect people's expectations to a certain extent. When the central bank reduces the refinancing rate, it means that inflation has eased in the eyes of the central bank, which will bring investment and economic growth, and adjust the industrial structure and product structure to some extent. Third, the nature of the two is different: rediscount nature: because the bill is a bill that the buyer's bank promises to pay unconditionally, the seller's bank is willing to accept the bill and provide the required funds to its customers in time. The purpose of commercial banks to buy such bills is to discount them. Because there is a time difference between the time of bill discount and the time of bill maturity, during this time, bill discount is tantamount to commercial banks providing loan support to their customers, so loan interest should be included. When discounting bills, commercial banks cannot buy bills at the original price, but must discount them at the original bill amount. This discount is the interest of discount financing, and the discount rate is usually called the discount rate. The nature of refinancing: refinancing is a quantitative monetary policy tool with strong planning, administration and passivity. However, it should be pointed out that it is impossible for any single and independent monetary policy tool to complete all macro-control by learning from the financial development experience of developed countries, but it is necessary to choose appropriate tools to cooperate and coordinate according to the monetary policy objectives in different periods.

What do you mean by refinancing and rediscounting?

Re-lending refers to the loans issued by the central bank to financial institutions in order to achieve the goal of monetary policy. Re-discounting refers to the fact that financial institutions such as commercial banks discount unexpired bills to the central bank for acquisition.

There are three differences between rediscount and refinancing: their essence is different: the essence of rediscount: rediscount is a discount bank held by the central bank by purchasing commercial banks but not yet providing financing support to commercial banks.

First, the essence of refinancing: refinancing refers to the loans issued by the central bank to financial institutions to achieve the monetary policy objectives. China's refinancing refers to the central bank's financial refinancing in a broad sense, which refers to the concept of refinancing including bill rediscount.

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Second, the role of rediscount: As one of the three traditional monetary policy tools of western central banks (open market business, rediscount and deposit reserve), rediscount has been widely used in many countries, especially in the secondary economic reconstruction of Germany, South Korea and other countries. Furthermore, it not only affects the credit expansion of commercial banks, but also has the function of selectively financing different kinds of bills and promoting economic restructuring according to the requirements of national industrial policies. The role of refinancing: the central bank affects the cost and availability of credit funds for commercial banks by adjusting the interest rate of refinancing. For example, if the central bank wants to tighten monetary policy, it will reduce the amount of base money, increase the loan cost of commercial banks to the central bank, and curb the loans of commercial banks to the central bank.

The adjustment of refinancing interest rate is an effective way for the central bank to publicize the changes of monetary policy to commercial banks and the society, which can have a forecasting effect and thus affect people's expectations to a certain extent. When the central bank reduces the refinancing rate, it means that investment and economic growth, industrial structure and product structure will be improved.

Third, the nature of the two is different: rediscount nature: because the draft is the capital that the buyer's bank unconditionally promises the goods and the bank is willing to accept the exchange. The purpose of commercial banks to buy such bills is to discount them.

Because there is a time difference between the time of bill discount and the time of bill maturity, during this time, bill discount is tantamount to commercial banks providing loan support to their customers. Therefore, if the discount is included in the loan interest, it cannot be discounted at the "original price" purchase amount. This discount is the interest of discount financing, and the discount rate is usually refinancing, which is a quantitative monetary policy tool with strong planning, administration and passivity. However, it should be pointed out that it is impossible for any single and independent monetary policy tool to complete all macro-control by learning from the financial development experience of developed countries, but it is necessary to choose appropriate tools to cooperate and coordinate according to the monetary policy objectives in different periods.