Liquidity Stratification In The Inter-bank Market: Measurement, Root Causes, Consequences And Countermeasures

After 2014,China 's foreign exchange reserves began to decrease year by year,and the base money supply was insufficient.The Central Bank began to actively release liquidity through open market operations.However,under this money supply system,the trading institutions that can conduct open market operations with the central bank are not completely covered,resulting in incomplete capital availability of the central bank and the formation of liquidity stratification.Starting from 2017,the Central Bank and the CBRC issued various policies to rectify the interbank business of financial institutions.The scale of commercial banks' claims on non-bank institutions began to decline,and inter-bank liquidity stratified.In May 2019,the Baoshang bank had serious credit risk(hereinafter referred to as the Baoshang incident),was taken over by the CBRC,and the market's belief in financial institutions was broken.The inter-bank money market has seen a flood of liquidity among banks but non-bank institutions cannot borrow money in the inter-bank market,the inter-bank liquidity is fragmented.Liquidity stratification refers to the structural imbalance between supply and demand in the inter-bank market.There are two specific performances: First,there is a large difference in the degree of liquidity between different markets.Banks often have abundant liquidity between banks rather than tight liquidity of non-bank institutions,or the liquidity of non-bank institutions fluctuates more than banks.;Second,due to the different nature of non-bank institutions(such as securities company asset management and securities company)?the different type of pledged bonds,the difference in capital costs exceeds normal levels.For the first performance,this article selects the standard deviation ratio of R007 and DR007 as an indicator to measure the inter-bank liquidity stratification.It is concluded that after the strict financial supervision in 2017,the standard deviation ratio of R007 and DR007 gradually increased,and presented Peaks appear at the end of the season,at the end of half a year,and at the end of the year.Aiming at the second performance,this article choose degree of dispersion to measure the inter-bank liquidity stratification.It was found that the degree of dispersion of R007 began to increase significantly after the Baoshang event in 2019,which indicates that even between non-bank institutions,the difference in the availability of money also varies due to the nature of the institution and the type of bond.From a macro perspective,the inter-bank liquidity stratification has weakened the effect of the central bank's base currency placement in the banking system and hindered the central bank's efficiency in guiding the inter-bank market interest rate.From the micro perspective,the liquidity stratification exacerbates the bank's internal credit stratification and restricts the credit risk appetite of non-bank financial institutions.In this regard,this article puts forward corresponding suggestions and countermeasures from the macro and micro aspects.For the macro aspect,this article proposes to expand the scope of the central bank's open market operations,enrich the central bank's monitoring of liquidity indicators,and establish an interbank market fund business independent inquiry and central fund merger mechanism.For the microcosmic aspect,this paper proposes that non-bank institutions as the capital financial contributors should strengthen the management of counterparty banks and improve the ability to identify pledged bonds;non-bank institutions as the capital incorporation parties should further enrich financing forms and improve their own business and improve the trading system and establish a good market reputation.