Bank of America(US:BAC) Huan Qiu Wang·2025-06-10 03:15Core Viewpoint - Recent regulatory measures have been implemented to restrict banks' deposit solicitation practices, which have become increasingly aggressive due to declining deposit rates and heightened competition for attracting deposits [1][3]. Group 1: Regulatory Measures - Local regulatory authorities have introduced comprehensive prohibitions on various deposit solicitation methods, requiring banks to phase out non-compliant practices by the end of 2025 [1][3]. - Specific banned practices include manual interest supplementation and the issuance of interest rate coupons, which have been used by some banks to covertly enhance deposit rates for select clients [3]. - The regulations also prohibit the distribution of physical gifts and partnerships with internet platforms for promotional benefits, mandating an immediate halt to such activities and the removal of related promotional materials [3]. Group 2: Market Context - The decline in market interest rates and loan rates has compressed banks' asset-side yield, necessitating a stable liability side to maintain profitability [3]. - As traditional deposit solicitation methods lose their appeal due to falling deposit rates, funds are increasingly flowing into wealth management products and mutual funds, making it more challenging for banks, particularly smaller ones, to attract deposits [3]. - The regulatory crackdown aims to close loopholes in the rules and reduce the phenomenon of banks artificially inflating costs, thereby mitigating the accumulation of systemic risks [3].