Macro-Finance Salon (No. 49): Outlook in 2017 on the Allocation of Bank's Assets and Liabilities
2017-01-13 IMI
In his speech, Wang Jian first proposed that the allocation of bank’s assets and liabilities is very important for managers, securities investors, financial institutions and the real economy. Then, he started from the analysis of M2 estimated through different channels and used the total amount of M2 to deduce backwards the situation of monetary base, so that we could know the liabilities and assets deposit in the central bank and the situation of the bank assets through the derivation of M2, so that we could roughly get the broad credit data within the balance sheet. Finally, he combined with the current infrastructure, the progress of PPP projects and the development of real estate to predict corporate growth and residential demand. Combining with the MPA assessment requirement, he analyzed the space of off-balance sheet financing, and made a reasonable outlook in 2017 on the allocation of bank’s assets and liabilities.
Then guests were asked to give their opinions. Mr. Jin Yu, analyst of the City Research Institute of ICBC, proposed that in recent years, in the context where the requirement of financial regulatory capital adequacy ratio is higher year by year and the economic is facing its downturn, the bank's asset risk began to expose. Many banks face the critical point of zero growth. One of the most prominent problems in the allocation strategy of bank assets and liabilities might be how to reflect the balance between these three elements: performance, risk and regulation. Mr. Jin thinks that reduced regulatory arbitrage can be used as a driving force for bank credit. Besides, bond investments and off-balance sheet financing will maintain a high growth.
