1. Report Industry Investment Rating No information about the report industry investment rating is provided. 2. Core Viewpoints of the Report - The background and operation mode of the Fed's overnight reverse repurchase tool (ON RRP) are inconsistent with the current orientation of domestic monetary policy operations. There is no need to separately establish a liquidity recovery tool for non - bank institutions in China [9][22]. - The central bank's new policy tools may revolve around implementing the narrowing of the interest rate corridor and liquidity rescue, and the form is different from ON RRP [9][12]. - The central bank's tool innovation will advance along the existing policy direction, and the policy goal of stable operation of capital interest rates is clear, with a generally neutral short - term market impact [34]. 3. Summary According to the Directory 3.1 China's Central Bank: "Providing Liquidity to Non - bank Institutions" and "Narrowing the Interest Rate Corridor" - "Providing liquidity to non - bank institutions" is a mechanism arrangement under specific scenarios, aiming to prevent financial risks and block the spread of risks to the financial system [9]. - The central bank has long aimed to narrow the interest rate corridor, but relevant tools have not been clearly implemented. Future new tools to narrow the interest rate corridor will not target non - bank institutions [10][11][12]. 3.2 The Fed: Overnight Reverse Repurchase, Interest Rate Corridor, and Liquidity Rescue Tools 3.2.1 Overnight Reverse Repurchase (ON RRP): The Lower Limit of the "Floor System" after QE - The ON RRP is implemented by the New York Fed at a fixed time through its open - market operating system, with counterparts including non - bank institutions such as money market funds. It has become a normalized tool for short - term liquidity management [14][15][19]. - The core background for the Fed to form the lower limit of the "floor system" through ON RRP is the large amount of liquidity redundancy caused by quantitative easing, which makes the reserve interest rate ineffective as the lower limit of the interest rate corridor. There is no need for China to set up a similar tool currently [19][22]. 3.2.2 Liquidity Rescue Tools: Money Market Fund Liquidity Facility, etc. - The Fed has created a series of emergency or temporary policy tools, such as the Money Market Mutual Fund Liquidity Facility (MMLF), which can effectively block the spread of risks in the financial system and maintain the continuous operation of the short - term capital market [24][25]. 3.3 Policy Conjecture: Causes of Capital Interest Rate Deviation and Speculation on Policy Tools 3.3.1 Large Deviations of Capital Interest Rates are Related to Policy Regulation and Bank Liabilities - Historically, large deviations of capital prices from policy interest rates are related to policy regulation and bank liabilities. Bank liabilities are one of the core factors determining capital prices [30]. 3.3.2 The New Monetary Policy Tools will Focus on Implementing the Narrowing of the Interest Rate Corridor and Liquidity Rescue - One new tool will target the implementation of "narrowing the interest rate corridor", operating on banks or primary dealers, and may be a "deposit facility" for primary dealers to regulate the lower limit of capital lending prices [32]. - The other new tool will target the implementation of "liquidity rescue", which may be established after the revision of the "Central Bank Law" or bypass direct liquidity provision to non - bank institutions through mechanism design [33].