The previous article said that the LPR did not change at all, which means that there was no interest rate cut. The explanation given is probably that there will be interest rate cuts, reserve requirement ratio cuts, and targeted interest rate cuts for existing mortgages, but you have to wait; because banks are suffering, the average interest rate spread is only about 1.5%. If the interest rate is cut immediately, the interest rate spread will be further reduced, and it will also trigger deposit relocation, etc. Balabalabala...
Let me explain this problem technically first.
The so-called interest rate spread is the difference between the interest rates of loans and deposits. All financial institutions basically make money from this. In essence, it is the bank's gross profit, and then the net profit after deducting various operating costs, taxes, and bad debts. The interest rate spread varies in different parts of the world. The average interest rate spread in most countries is above 2%. my country's current interest rate spread is around 1.5%, which is indeed lower than the average level.
The interest rate spread is mainly composed of two parts. One is the difference between the interest rate of demand deposits and loans. The interest rate of demand deposits is basically equal to zero, so once the interest rate is cut, this part of the interest rate spread will definitely decrease. The second is the difference between the interest rate of time deposits and loans. This part is theoretically synchronized, but when the interest rate is cut, some people may withdraw their deposits to buy wealth management products, insurance and other financial products, and some people may buy stocks, which will lead to a reduction in the principal used by banks to make money. Therefore, interest rate cuts are bad news for banks, and interest rate hikes are good news. Generally speaking, bank stocks will fall during interest rate cuts and rise during interest rate hikes.
The interest rate spread is not a fixed thing. In an inflationary society, everyone likes to borrow money, and it doesn't matter if the interest rate is high, so the interest rate spread is usually higher than 2%; but on the other hand, everyone likes to save money and doesn't like to borrow money, so the interest rate spread will be very low. For example, Japan's lowest point was 0.5%. Since most parts of the world are inflationary, it is reasonable for the interest rate spread to be higher than 2%; our current manufacturing capacity is far greater than our consumption capacity, so it is also reasonable for the interest rate spread to be lower than 2%.
According to my good faith understanding, the interest rate cut for existing mortgages may indeed be in progress, and this incident has put too much pressure on banks, so it will delay the normal rate cut process. It is similar to giving someone a candy before giving him a slap.
From the perspective of preparations in all aspects, they are actually quite sufficient. For example, as you all know, at the end of August, the expected rate of return of insurance products was reduced from 3% to 2.5%, which obviously means that the interest rate level of the whole society will be reduced by about 0.5%. On the bright side, the path of interest rate cuts is very clear, and it will be reduced sooner or later. But there is a point here, as the interest rate spread decreases, the financial industry will no longer be a high-end, rich and handsome industry, but will become a hard-working industry.
This is easy to understand. If you made a lot of money in the past, you will be rich and handsome. If you make less money in the future, you will be miserable.
In the United States, the financial industry has always been the top, rich and handsome, because Wall Street can really make money; but in Japan and Europe, it is actually average. Let me give you an example. The average starting salary for college graduates in the Japanese financial industry is about 200,000 yen, which is equivalent to about 10,000 yuan, which is about the same as the salary of a factory worker. This is the result of a long-term low interest rate differential. It was not until last year that the Japanese stock market began to rise, and salaries began to rise this year, rising to about 260,000, which is about 13,000 yuan. I think this salary level is shabby. Is this still the level of the financial industry in an old developed country?
I have written a lot of ramblings, but what I am most concerned about is when the interest rate will be cut. I finally see some hope of recovery now, can you give me a hand?
