This article LTG GoldRock will share with you the knowledge of the industry's borrowing market ~
The function of the industry borrowing the market:
Provide financial institutions with a mechanism that realizes liquidity.
Increase the profit level of financial assets .
Timely reflect changes in funds for supply and demand.
Become a central bank's effective implementation of monetary policy market mechanism .
The main contents of the industry borrowing the market:
Management of market access.
Management of disassembly and disassembly.
Management of borrowing period.
Management of borrowing and guarantee.
Management of borrowing market interest rate .
Indirectly adjust the market supply and demand and interest rates.
The formation of the industry borrowing the market:
The root cause of the industry's borrowing market first appeared in the United States. The root cause of its formation is the implementation of the statutory deposit reserve system.In accordance with the "Federal Reserve Law" adopted in the United States in 1913, membership banks that joined the Federal Reserve must pay the federal reserves banks to the Federal Reserve Bank at a certain ratio of deposit. EssenceDue to the changes in liquidation business activities and daily receipts, there will always be some bank deposit reserves, and some bank deposit reserves are insufficient.Banks with excess deposit reserves need to use the extra part to obtain interest income , and banks with insufficient deposits must try to borrow funds to make up for the reserve gap, otherwise they will be possible.The central bank's economic penalties were subject to the extension or less reserve.In this case, banks with redundant deposits and insufficient deposits need to be objectively adjusted.As a result, in 1921, the federal fund market for the preparation bonus of the Federal Reserve Bank Member Bank in New York, USA.
After experiencing the first capitalist economic crisis in the 1930s , Western countries generally strengthened the role of central banks and successively introduced the legal deposit reserve system as controlling commercial bank creditThe scale of scale, which is compatible with this, has also developed rapidly.After a long period of operation and development, the interbank borrowing market of Western countries today is compared with the formation of transaction content, or in terms of financing scale and other aspects.Deeply changed.Borrowing transactions not only occurred between banks, but also extended to banks and other financial institutions.From the perspective of borrowing, it is not limited to supplementing deposit preparation and exchanges of flat bills.What's more important is that interbank lending has become an effective tool for banks to implement asset -liability management .Due to the short period of borrowing in the industry and the small risk, many banks put short -term idle funds in the market to facilitate timely adjusting the asset -liability structure and maintaining the liquidity of assets.Especially those small and medium -sized banks with limited market share , with fragile capabilities , are the place where the same industry borrows the market as a place for short -term funds.Quality , reduce operating risks and increase interest income.
