Twisted relationship between banks and the bank will eventually victims

Updated: October 20, 2015  Views: 56

Recently, East China's largest textile companies Baolijia bankruptcy, chairman Ge Fuchun in the 'Notice to the community and the employees Baolijia book' frequently mentioned reason for business failures are various financial institutions and government loans received intensive policy commitments unfulfilled enterprise fund strand breaks.

Develop without the support of bank funds of enterprises, investment hot spot when the market rise, which will have a lot of money into trying to Fengeng, which also very easy to make this industry gradually form a foam, such as the real estate industry in recent years is Typical of capital to get together the benefits of industry to follow suit very easy to do it, the downside is that the industry is more bigger and bigger bubble, and finally to affect the entire economy faces. market funds are like foam, but foam for banks not a good thing, because liquidity to the foam industry will lead to weakening of bank lending, corporate finance would suffer unburdened. And not only affected the bank's business, but also by the impact of social capital movement, when an industry continually give money easily and has a very low threshold When the impression that other companies will certainly have to pay to finance higher than the industry's interest to make money, people will be willing to lend money to businesses.

Butterfly Effect funds thus a price: real estate price bubble bubble pushing funds, corporate funds with high-cost manufactured goods, or is cutting corners, or is to low-wage cost of local or regional government promised concessions to produce so that when funds. When high prices, companies are more concerned about how to reduce the production costs front, instead of a long-term care how much effort to product development, over time companies will lose competitiveness.

Explain these, only shows the current predicament is not only business enterprise itself, but the attitude of the financial markets business, the most pressing issues facing businesses is the bank loans drawn. To activate the competitive vitality of enterprises, governments from taxation, cost of capital, put open access, breaking monopoly and other aspects to infuse vigor, so that enterprises have a good business environment, abandon the past that favoritism of industry protection, in addition to these, to solve the unusual relationship between banks, is also very important. banks and enterprises the relationship between tense, the reasons are complex.

First, the policy can be expected is low, business is difficult to predict the situation changes. For a long time, investment, consumption and export support economic growth, the importance of investing goes without saying that companies are in such an environment will certainly turning back on investment, companies that only scale up is bigger and stronger, but fortunately have a foothold in the market. In policy of monetary easing, the government investment, bank credit, business expansion three forces hit it off, but when the market environment changes in monetary tightening, the fixed assets of the expansion of some enterprises is still underway, while bank credit funds shut the gate but in advance, companies can not survive was hanging in the air, no one to turn to die.

Second, banks judge the market will affect the continuity of business credit. When the economy risk, the bank first thought was safe own funds, this idea of course is understandable, especially those responsible for the bank's lending has a strict accountability system Market risk escalating prompt level, bank manager self-protection is the best time to recover the loan, so they will use various ways to make loans handled by their own rapid recovery even as long as there's a little bit of an adverse signal, even if business activities completely normal, even if the loan has not expired, the bank may also find out the reason for the early termination of the loan, which is very likely to lead to 'stampede' type recovering loans. security alert level to enhance the bank in a panic stampede turned into a take-up loans Repeat rolling, so that enterprises are facing tremendous pressure.

The third is the bank's own activity decreased forced the early termination of credit to enterprises and some joint-stock banks, small and medium banks funding sources is not very stable in the market is good, they want to maintain good customer relations, only be maintained by lending credit relationship between the families, and in some places is not very developed economy, the bank's capital adequacy remaining generally sides intermodulation funds remaining places, more bank lending to economically developed areas, but the housing market, the stock market, such as the Internet rounds After suction gold once missing bank liquidity, the bank will have credit business loans ahead of time to recover, to the solution of their own urgent.

In short, the bank pumping more loans from the bank to change the attitude of the market, as people will have the ability to run when the bank payment doubt as banks doubt on the real economy will lead to a chain smoked prime. To solve this problem, it is important It is to restore confidence in the banking market, and confidence can only come from decentralization, from the real to the allocation of resources by the market. administrative intervention and resource monopoly undermine the operation of the law of the market, as the stronger party banks can easily decide the fate of the enterprise But banks and enterprises is a symbiotic relationship, if businesses were hurt, then punished by the market from the bank can have far? Get Top News, Latest News and Current News from Latest Current News: U.S., China, World, Entertainment, Health, Finance, Business, echnology, Travel, Politics, Sports.