1/6 Liu Xiaochun, Vice-President of Shanghai Finance Institute, pointed out in his recent commentary that we shouldn’t overinterpret #LPR, which is simply the marketization of interest-formation mechanism, and is irrelevant with interest rate cut. mp.weixin.qq.com/s/NRml9uklZsqb… 
2/6 Liu said, adjustment of central banks on interest rate is a macro-control measure. As for individuals, it is important to manage their assets and liability, and thus controlling operation risks. These may affect accessibility and cost of individuals’ financing.
3/6 Factors that determine the bank’s loan interest rate are not singular. The first is the cost of bank's own #capital, which includes two aspects: one is the deposit interest rate absorbed by banks; the other is the #interbank interest rate.
4/6 The deposit interest rate, at the macro level, is related to the supply and demand of market funds in a certain period of time, and is also related to the national deposit habits. At the micro level, the deposit interest rate of a bank might affect its reputation.
5/6 Relatively speaking, big banks have higher market position and better reputation than small banks, and the cost of access to #deposits is lower for big banks. Shareholders or banks with strong backgrounds have high market credibility and the cost of obtaining deposits is low.
6/6 The #interbank market interest rate is mainly influenced by the supply and demand of funds in the market and the central bank's monetary policy. At certain stage, it would be affected by the supply and demand of own funds of market funds.
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