idle funds

Idle funds refer to the flow of funds between multiple institutions in the financial system, which does not flow into the real economy or at least does not directly flow into the real economy.

There is no idling of funds, but the financing link has been lengthened. The mainstream view is that "finance serves the real economy". Therefore, as long as funds do not flow directly from financial institutions to the "real economy", then the link before the last flow to the real economy is regarded as "idle funds".

For example, demand deposits are kept in banks, and the interest rate is 0.35%. But if you take it out and deposit it in Yu 'ebao, Yu 'ebao will make your money into an agreement deposit and deposit it in the bank, and your yield will be 4 to 5 percentage points. For banks, the funds are still those funds, but the cost has increased ten times.

For another example, the one-year bank loan interest rate is 6%, but many local government financing platforms and real estate enterprises that need funds have to lend through bank-trust cooperation and bank-securities cooperation. During this period, from one bank to another, to the trust, to the entity, every link in the middle will charge half a point to one point, "pushing up the cost of capital".

The form of idle funds

Usually, there are the following forms of fund idling.

1. Interbank certificates of deposit and interbank purchase of wealth management products.

Big banks are well funded, but their risk appetite is low. In the economic downturn, the potential risks brought by bank lending are higher than those brought by interbank deposit certificates and interbank financing. In order to control risks, big banks make small moves to obtain funds, and the two hit it off, forming idle funds.

For example, during the epidemic, the central bank released water to the six major state-owned banks, and the six major banks may not lend to small and medium-sized enterprises at once, but it is impossible for them to sleep with a lot of money. So they lend money to city commercial banks or rural commercial banks at low interest rates. Because big banks know the risks, so do small banks. So small banks take funds to buy wealth management products whose income is higher than the cost, thus forming idle funds.

2. Bank outsourcing

Bank outsourcing means that banks entrust their own or on-balance-sheet and off-balance-sheet wealth management funds to non-bank institutions for management, instead of directly transferring information from fund banks to bonds or credits and flowing into the real economy.

For example, many special funds, priority funds in the 20 15 leveraged bull market, etc.

3. Investing in non-standard assets

Banks invest in non-standard, equity, real estate and other restricted areas through trust plans and asset management plans, so as to avoid supervision, limit the investment scope, reduce the provision for venture capital, and bypass loan-to-deposit ratio and other regulatory indicators.