金融英语阅读：债务融资

The most traditional form of bank financing is bank deposits, both at call and fixed deposits. However with the steady decrease of the deposit rates, the incentive for investors to leave money sitting in the bank has decreased, even more so now that depositors have to pay 20% tax on any interest earned. For a bank, deposits are the least expensive of all funding sources. One of the biggest problems facing banks is that they tend to do the majority of their lending through housing loans, which is generally for terms between 15 to 30 years. Deposits on the other hand are for terms ranging from 1 month to 5 years. If the bank were to provide a borrower with a 20 year housing loan of 1 million RMB, the bank would need to find a customer or a number of customers to commit to a total fixed deposit of 1 million RMB for 5 years. Note that investors would be unwilling to do this when interest rates are volatile or when inflation is high. After the end of the 5 years, they would need to find investors that are willing to do this another 3 times in order to ensure that the housing loan is fully funded. This results in funding risk to the bank. The liability management department in the bank looks after this risk.