Sheng songcheng and zhang xuan hold the opinion that yu’ebao, essentially, is a policy arbitrage, fortified supervision shall be made to ensure a fair and orderly financial market  xie-pingze believes that yu’ebao cuts down partial margins and profitability of traditional commercial banks by al-tering deposit structure of banking industry. No crackdown on yu’ebao by meng jing (china daily) 2014-03-05 00:03 comments print mail large medium small yu'ebao, ,is being closely watched by the banking industry and the internet. The size of yu’e bao already influences china’s inter-bank lending market, where most of the fund is invested in also, if anything went wrong with yu’e bao, the impact would be felt across the whole market. After a shadow banking crackdown shrank the pool of investment products in china, money market funds are seen as a safer investment as trade war uncertainties weigh on stocks, while offering returns close to those of bonds.
Influence of yu’ebao on the chinese banking industry due to factors of system and policy, traditional banks are at the core of finance services however, with the deepening of reform in all. Separately, media are reporting that alibaba has tentatively chosen the date of august 8 for its highly anticipated new york listing, which had been previously rumored due to its significance as a lucky day on the chinese calendar yu'ebao has revolutionized china's banking industry since its launch last summer by offering consumers a strong alternative to traditional savings accounts.
In february 2014, chinese international capital corp estimated that online money-market funds could soak up 8% of total consumer deposits in three years the leader is yu’ebao, which has over $98 billion in assets and 200 million users to date the plummeting rates are partially tied to trends in china’s monetary policy. Yu'ebao, which offers consumers a way to invest their idle cash in money market funds with higher returns than typical bank deposits, has become widely popular with the public, although some. According to china securities news, yu ebao has attracted more than 400 billion with more than 61 million users by march 15, 2014 this explosive growth has caused a hot topic in society. Therefore, the rise of yu’ebao weakened the position of the banking industry in the financial market 61 demand deposit service in terms of yield, in 2014, the annualized yield of yu’ebao was 48%, the interest rate of demand deposit was 035%, and that of one-year term deposit was 29.
Wang dengfeng, the fund manager of yu'ebao, said it's only natural that rates for online financial products would decline since the end of the year, when chinese banks see deposits weaken based on market conditions, it is normal for the annual yield on yu'ebao to return to about 4 percent, said wang. The world’s top money market fund, yu’ebao, marketed by alibaba group holding ltd’s ant financial affiliate, saw record outflows in the second quarter in the wake of efforts to control its expansion.
Yu'ebao has revolutionized china's banking industry since its launch last summer by offering consumers a strong alternative to traditional savings accounts the product allowed users of alibaba's alipay electronic payments service to put their idle cash into an yu'ebao account, initially delivering yields of 6 percent or more - well above the level for tightly regulated bank savings accounts. Chinese investors flocked into money-market products at a rate outpacing equities and bonds last quarter, adding to what is already the biggest segment of the nation’s mutual fund industry.
For example, the first move to shakeup the financial markets with new private players began in june 2013, when alibaba launched a money market fund called yu’ebao at the time alibaba’s chief executive, jack ma, was quoted as saying: “china’s finance industry, especially the banking industry, only serves 20 per cent of clients.
The growth of online financial products, such as yu'ebao, an investment service offered by tian hong asset management co ltd and alipay (an e-payment division of alibaba group holding ltd),is being closely watched by the banking industry and the internet sector. The leader is yu’ebao, which has over $98 billion in assets and 200 million users to date the plummeting rates are partially tied to trends in china’s monetary policy yu’ebao cash is parked in a combination of interbank deposits and government and corporate bonds both types of assets are subject to the whims of china’s central bank.