On May 7, the Shanghai Composite Index went on a roller coaster ride and finally fell 1.6%, with a daily fluctuation of 4%. Yesterday, China's A-share continued to fall, which may be related to the CSRC's efforts to strictly control the risk of margin trading (or two financing) again. A-share investors have been very vigilant about this.

Zhang Yujun, the assistant chairman of the China Securities Regulatory Commission, said yesterday when attending the meeting in Shanghai to listen to the opinions that securities companies should prudently and reasonably determine the total amount of financing business, control the risk of margin trading, and link the net capital of securities companies with the scale of margin trading. Zhang Yujun suggested that the balance of two loans of a single securities company should not exceed 4 times the net capital of the company at the end of the previous month. Securities companies that have exceeded the above requirements should not lend new funds and securities to customers. It can be said that this is the second time in a month that Zhang Yujun has been emphasizing the control of financial risks. Moreover, on April 17, the Securities Association of China issued a notice requiring securities companies to submit the two integration regulations and risk assessment report before May 8.

In fact, why has the management been emphasizing the control of the risk of financial and financial transactions, and the market will cause the stock market to plummet once it touches the nerve of the stock market? The most important problem is that the biggest driving force for the rapid rise of the stock market is to let a large amount of funds flow into the stock market through the two financing, which has become the biggest driving force for the current rise of China's A shares. This is the most different place from any previous rise of Chinese A-shares. In this case, as soon as investors hear that the regulators need to strengthen the risk control of the two financing businesses, they will think that the capital flowing into the stock market will tighten and escape, leading to a sharp fall in the stock market. Therefore, investors will flee as the best policy. Especially for the early investment, it will be more safe to pocket money and make money.

However, in fact, the recent inflow of capital from the stock market is only one aspect, and not the biggest one. The most important aspect is the monetary policy, and the interest rate level of the overall financial market. Especially in China, when the stock market has not completely got rid of the policy market, it is necessary to clearly understand the government's stock market policy orientation. If the monetary policy of the central bank is not tightened, and on the contrary, it is still relaxed, then the capital flow that affects the decisive stock market will flow into the stock market. In addition, the government's policy orientation towards the stock market remains unchanged, and investors need not worry too much about the decline of the stock market, because it is normal for the stock market to decline rapidly.

In this paper, although the Chinese government does not admit that it will launch the Chinese version of quantitative easing monetary policy, in fact, the Chinese version of quantitative easing monetary policy has been no inferior to the United States since 2008. The excessive credit expansion of the People's Bank of China will only be larger and faster than the Federal Reserve, but not less. This has been the case in the past, as it is now. It's just that the methods used are different. Recently, the central bank's reserve ratio reduction and interest rate reduction, capital injection to policy banks, targeted reserve ratio reduction, and the introduction of a variety of new monetary policy tools are all different forms of Chinese version of the volume breadth. Especially in the current situation of greater downward pressure on economic growth, these excessive credit expansion policies of the Central Bank will only be strengthened rather than weakened. Therefore, the current monetary policy of the central bank is still good news for the stock market, rather than tightening liquidity. Therefore, stock market investors must keep a close eye on the current changes in the monetary policy of the domestic central bank to see if there are any changes. Look at whether monetary policy is loose or tight, which is the most important master of the current rise and fall of the stock market.

In addition, the regulatory authorities have been emphasizing risk control on the two financing businesses, which should be a very conventional regulatory behavior. The purpose is to hope that the leverage of the stock market will not cause huge risks in the market and can develop healthily. Moreover, from the existing provisions, that is, the balance of margin trading should not exceed 4 times the net capital, which does not have much binding force on securities companies.

Because, from a static point of view, if calculated from 4 times of the current net capital of securities companies, the balance of margin trading and securities lending provided by securities companies can reach 3 trillion yuan, but the current balance of margin trading and securities lending is only about 1800 billion yuan, and there is still a large amount between the upper limit and the actual demand for margin trading and securities lending. Moreover, the current total market value of China's stock market is 50 trillion yuan, which can also reach 2.5 trillion yuan according to the proportion of international experience in margin trading. There is also more room.

From a dynamic point of view, the net capital of securities firms is a variable amount. If the regulatory level has this need for the proportion of margin trading, then the securities companies can increase their net capital and net capital scale through equity financing. Therefore, the risk management and control of the regulatory authority over the margin trading business, in fact, will not have a great impact on the stock market financing leverage. More importantly, it is important to constantly remind investors to control the stock market leverage investment risk and not get involved in it. When the stock market falls, it will pose a greater risk to investors.

It can be seen that market liquidity is the core of the stock market game, but the most decisive factor of market liquidity is the monetary policy of the central bank. The central bank's monetary policy is the master of the rise and fall of the stock market. This is the investment rule that stock market investors should understand. Especially for new investors entering the stock market, it is the first step that must be learned. If we have a clear view of the trend of the central bank's monetary policy, investors can let the wind and waves rise in their investment in the stock market and stay on the fishing boat.