Feng Huang Wang·2025-12-16 01:36Core Viewpoint - The announcement from the interbank market dealers association has put state-owned banks under scrutiny for bond underwriting violations, particularly focusing on Postal Savings Bank of China, which is under self-regulatory investigation for allegedly breaching principles of fairness and diligence [1] Group 1: Regulatory Actions - As of December 15, 2025, a total of 19 penalties related to bond underwriting violations have been disclosed by the association and exchanges, indicating a growing concern over compliance in the industry [1] - The self-regulatory investigation into Postal Savings Bank is part of a broader trend, with other institutions like China Galaxy Securities and China Merchants Bank also facing investigations for similar issues [1] Group 2: Market Dynamics - The case of Guangfa Bank, which had a bond underwriting fee significantly below market rates, highlights a troubling trend where institutions engage in "loss leader" strategies to maintain business volume, leading to regulatory scrutiny [2][3] - Many banks are reportedly using a "comprehensive revenue account" approach, where they offset losses from bond underwriting through deposit retention and adjustments in loan rates, distorting market pricing mechanisms [3] Group 3: Future Outlook - With increasing regulatory pressure, the bond underwriting ecosystem is expected to undergo significant changes, moving away from price competition towards a focus on service and risk management [4] - The "price for volume" strategy may become unsustainable, leading to a potential rise in underwriting fees that adequately cover costs, while smaller institutions lacking core pricing capabilities may face accelerated exit from the market [4]