你要移动银行的奶酪? 休想!
2014-02-10 23:57阅读：
你以为余额宝等等就可以移动银行的奶酪? 你想得太简单了!
by Joe Zhang, South China Morning Post, 11 February 2014,
Within just six months, Yuebao, the partnership between China’s
Alibaba, and a fund house, Tianhong, raised 250 billion yuan
(HK$318 billion) from millions of little guys to invest in money
market funds and treasury bonds.
Other internet companies, such as Tencent and Sina.com, are
launching similar services.
All of a sudden, the market is euphoric about the beginning of the
end of China’s stodgy and bureaucratic banks. After all, these
banks are predominantly state-controlled and have never been nice
to the little guys.
A sleek new force coming out of nowhere to challenge the entrenched
banks is an exciting development.
Except that this is just a story. The reality is that it is not
easy to move the cheese of the Chinese banks. Not yet, at least.
Let’s look at some inconvenient truths.
First of all, despite the hoopla, the 250 billion yuan is just 0.24
per cent of the banking se
ctor’s total deposit base.
Second, none of these e-commerce companies and e-finance platforms
has an established base of borrowers or banking skills. Moreover,
they do not even have a lending licence.
Strictly speaking, the buying and selling of money market funds by
Yuebao is a grey area in the regulatory framework. It is a clever
innovation, and the regulators have so far turned a sympathetic eye
to this borderline case. But if it somehow spreads like wildfire,
the regulatory sympathy could evaporate.
Third, how is Yuebao – or other, similar operators – going to use
the money it raises from the little guys? So far, its only
investment options are money market funds, treasury bonds and bank
deposits.
But money market funds must, in turn, invest the money somewhere,
predominantly in bank deposits and treasury bonds. So, in a way,
instead of competing with the banks, the likes of Yuebao are
working for the banks.
Of course, the manoeuvre by the likes of Yuebao will raise the
returns for the millions of little guys, but those returns will be
capped by the willingness of the banks to accept the recycled
money.
It is true that the work of Yuebao and rivals will push up the cost
of funding for the entire banking industry, but the extent of that
funding cost increase is totally dependent on the banks’ ability to
pass the higher funding costs to borrowers.
On the face of it, the little guys are moving money from bank
deposits to buy financial products. But given the size of the
banking industry in China, the banks collectively determine the
yields and prices of financial assets.
Finally, one must ask the question, why do Google and Amazon, for
all their resources and popularity, not do in the United States
what Yuebao is doing in China?
The reason is simple: the business model does not exist in the US.
Why? It is because of the free-market interest rate regime.
But as much as one-quarter of the funding for China’s banks is
already driven by market interest rates. That is the so-called
wealth management products. In this particular segment, the banks
actually make a higher interest margin, because, in addition to
passing the higher funding costs to end users of the money, they
charge multiple service fees and higher rates.
It is conceivable that in the next five to 10 years, all the
funding sources of the banks will be subject to market rates,
thanks to pressure from the likes of Yuebao.
The banks’ lending rates will move up in a parallel manner, with
banks’ profitability either unchanged or even enhanced. As we
approach that point, Yuebao and the like will gradually lose their
relevance.
By then, they either become glorious martyrs for the Chinese
interest rate liberalisation, invent something else or die a slow
death.
At present, Yuebao and the like are harmless to the banks. When
they start to move the banks’ cheese, the banks will fight back by
simply raising interest rates, one way or another, to keep deposits
and so eliminate the scope for the recycling of deposits.
The likes of Yuebao will still have their usefulness: pooling the
money of the little guys to invest in treasury bonds and money
market funds.
But that business model has no “moat”: the banks can do this for
the millions of their customers at a tiny marginal cost. Thus far,
they have not bothered to do it. But if the need arises, who is
there to stop the banks from offering even better products, given
their vast capabilities to cross-subsidise between various lines of
business?
After all, investing in money market funds and treasury bonds is
not risk-free. One wave of losses on the back of some volatility
would be sufficient to cool the euphoria we have so far
witnessed.
In conclusion, the likes of Yuebao are doing Chinese savers a great
service. Their continued efforts will force the banks to gradually
raise the interest rates on short-term deposits, one way or
another, with the rate hike being officially sanctioned by the
central bank or without.
As a result, the yield curve in the banking sector will experience
a parallel shift upward. In the long term, that means a slowdown of
total credit growth – and a more rational economy.
Joe Zhang is the author of Inside China’s Shadow Banking: The Next
Subprime Crisis? and a corporate governance advisor in Hong
Kong.
