There are both advantages and disadvantages

Benefits: 1.

Provide more sources of funds for financial markets. The increase in deposits can provide banks with more deposit funds, allowing banks to expand their loan scale and provide more financial support for the real economy.

2.

Promote the healthy development of financial markets. After banks absorb more deposits, they can provide more support to the real economy through investment, loans, etc., and at the same time, they can also provide more financial support to the capital market through capital markets and other channels to promote the healthy development of the financial market.

3. Promote residents’ savings awareness. The record-breaking deposits indicate the increasing awareness of savings among residents, which is beneficial to the financial planning and long-term development of individuals and families.

Disadvantages: 1. Reduce consumer demand. Due to the increase in deposits, some people may deposit more funds in banks and reduce consumption, which will have a certain negative impact on economic development.

Increase the bank’s risk.

2. As deposits increase, banks’ liabilities are also increasing. Once some problems arise, they may threaten the stability of the bank and then have an impact on the entire financial market.

3.

Slow down the flow of capital

Slow down the flow of capital. If a large amount of funds are concentrated in banks, it may slow down the flow of funds, causing some funds to be unable to flow to the real economy, thereby affecting economic development