Bank financial products yields soared to 7% triggering market concern

The current “liquidity crisis” in Chinese banks booms the financial market. Recently, the financial products yields continued to climb, some financial products are expected to offer yields as high as 7%. According to the Bank Rate Network statistics, as of yesterday, among the available financial products, 23 financial products’ expected return is higher than 6%. And these high yielding financial products are not all targeting at high-end customers, eight financial products request a minimum investment of only 100,000 yuan or US$ 16,000, and the investment period is less than three months.

“Tomorrow we will issue several more financial products; the expected return rate is 6.5% or more.” A joint-stock commercial bank financial manager told reporter that although the financial products’ return rate is expected to be less than the previously offered financial products’ 7% but the coming financial products will also come with low risk since the investment targets will be bills, debt and other low risk investments.

State Council Development Research Center, deputy director of the World Development Institute Ding Yifan said that the financial products issued by bank can also risky. Some scholars even considered the issuance of such high return financial products as “desperate actions” of bank in face with the “liquidity crisis” in the Chinese banking sector.

Source: Beijing Morning Post

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