Institutional Arbitrage, Popular Interbank Forex Trading, Relies On Customer Disk Guidance.

The era of institutional arbitrage will never go back, and it will be a real market game to meet the interbank foreign exchange market.

The liberalization of capital and the marketization of interest rates and exchange rates are becoming more and more high. Market arbitrage opportunities will focus on non institutional pricing deviations and central bank market alignment operations.

Such opportunities will become more and more rare and hasty.

More opportunities in the future will be driven by events in a basket of currencies and a phased prediction of China and the global macroeconomic situation and capital flows.

Institutional arbitrage reflects the price game of foreign exchange reserves.

When arbitrage becomes the pricing driving force of the US dollar, the interest rate formation mechanism of the US dollar falls into the market where cross-border capital can not flow freely.

Cyclical cycle, based on the theory of interest rate parity, the trend of RMB exchange rate is also tied down.

Therefore, in the past 10 years, the direction of foreign exchange trading of commercial banks basically depends on the volume of passenger traffic.

In March this year, Wang Yungui, director general of the comprehensive administration of the safe, said that China had many tools to manage capital outflows and did not rule out a Tobin tax on short-term cross-border capital flows in the future.

In July, Liu Mingkang, chairman of the former China Banking Regulatory Commission, made a statement on the Tobin tax. If the national security is threatened, it is possible to take capital control and implement the Tobin tax.

Chen Jun pointed out in the article that since 2015

The arbitrage and speculative capital outflows caused by the devaluation, the central bank and the foreign management have offered a number of temporary measures to control capital outflow by raising paction costs.

The increase of paction cost has made up for the defects of the foreign exchange management system in this special period, but it has also suppressed the vitality of the market and is not a permanent solution.

In the face of the slowdown in real demand growth, the US dollar has no arbitrage and speculative demand support, and interest rates are gradually moving closer to the international market.

At present, it is a very suitable time window for reforming the foreign exchange management system to conduct macro Prudential Management of cross-border financing, restrict capital strength, liberate the external debt limit of enterprises and financial institutions, and guide capital inflow.

In response, Chen Jun put forward the following four suggestions:

At present, interest income earned by overseas branches of Chinese banks has been waiver of income tax on non residents' interest income, and foreign banks still carry out corresponding tax rates.

It is suggested that the tax authorities should coordinate the tax and tax departments into the macro Prudential management system, and appropriately reduce or abolish the tax burden during the period of encouraging capital inflow, so as to reduce the financing cost of domestic banks.

Under the framework of macro Prudential Management of cross border financing, commercial banks continue to rely on client traffic to increase the risk of self investment, and self traders need to improve their macroeconomic intuition and Market Research judgment ability.

It is possible to launch RMB futures trading and floor options trading, and further improve the RMB exchange rate price formation mechanism through market forces.

Regulators need to monitor the cross-border financing dynamics of banks and enterprises more closely, flexibly adjust factor coefficients to guide commercial banks to rationally configure cross-border financing resources, and coordinate micro interests and macro demands.