Author Archives: Chang Tian

Is solar energy our future?

Thesis: Solar energy industries is boosting and promising, but there are still problems to solve if consider it as future major energy source.

Solar energy has become the energy source that has the most rapid increasing rate. According to Hanergy Energy Holding Group and China New Energy Chamber of Commerce’s Global Renewable Energy Report 2014, the solar energy consisting solar thermal energy and solar Photovoltaic skyrocketed from 10.1 Terawatt hours globally in 2007 to 151.3 Terawatt hours in 2013, nearly surged for 15 times, whereas the total power consumption only increased 20.48% within 2007-2013 range. Also, the cumulative installed capacity of solar energy rose from 10.3 gigawatts to 144.3 gigawatts globally, in the same time range.

Screen Shot 2015-04-20 at 5.18.58 PM

Within the boosting solar energy market, China has become the leading country in 2013. Germany used to be the leader in solar energy; however, the global photovoltaic market gradually moves its focus from Europe to Asia. China, Japan, the Middle East and Southeast Asia became important strategic market for photovoltaic enterprises. Japan kept up its pace in solar power electricity after the devastative Fukushima Nuclear power plant explosion. Japan started to seek backup clean energy source to substitute nuclear energy and to satisfy its electricity demand.

Problems at the back of the exuberance:

  • Connection problem. Since solar energy photovoltaic plant needs large tower plant and large plain ground to spread out all solar cells without overlapping on each other, enterprises choose the build solar energy plants at rural areas with cheap and plain ground. Then the connection between these rural areas and population centers where is the major location the electricity generated to the consumed become crucial. According to Bloomberg, there is still approximately 30% of the solar power installed in 2013 waiting to be connected.
  • Efficiency of transmission line, electricity grid. A great quantity of energy is lost on the long transmission line and at low-efficiency electricity grids. Improving storage efficiency and transmission efficiency is another important task to deal along with increase solar power technology.
  • Solar power plant can maintain competitive in energy market count on large government subsidy. However, in order to swipe off dependent on dirty coal-fire energy, government must have spent great amount of money on shutting off coal mining industries and setting up new energy infrastructures. Rivals of solar energy with lower marginal subsidy need from government, such as nuclear power, turns to be more competent. However, with lower mortality rate, solar industry would be more beneficial in the long run, so how to finance and support the solar energy industry in the foreseeable future is significant to one’s energy distribution.

Chinese Minister of Commerce should set up regulations on e-commerce credibility

Thesis: It is time for Chinese Minister of Commerce to think about regulations on e-commerce rating and credibility

China has become a giant in e-commerce sales, attracting more attentions on the online shopping regulations and monitoring. The online retail sales in China reached $296.57 billion in 2013, 13% more than U.S. e-commerce sales of $262.51 billion.

Also as I mentioned in the last blog post, the total B2C e-commerce sale in China reached 110.04 billions of dollars while the worldwide statistic is 1233 billion, in which China occupied 8.92% of the total transactions.

However, the boosting online consumption market reveals its drawbacks in an acceding rate, due to the virtual stores rather than real stores in the online platforms. One significant concern is the falsely boosting customer reviews and questionable credibility of merchants. Some merchants who providing high resemblance counterfeit products need more credible reviews to attract customers and dilute the bad quality reviews. How to distinguish these cheating merchants is a crucial task for regulating department of these online platforms. Some detecting techniques require data-mining skills to analysis the frequently pop-up IP address and fake IP information. Also some special goods like cosmetic products, leather bags and household products are the easiest segments that one can find some fake merchants.

Chinese Ministry of Commerce announced yesterday that a draft law on regulating online merchants standards and reducing counterfeit products on e-commerce market would be initiated soon. Stiff penalties and fines, raising requirement level for opening up stores online are possible legal constraints in the coming draft law. Just like “Alibaba only allowed brands and their authorized resellers to open shops in popular categories of its Tmall site. The rule applies to cosmetics, shoes and bags, apparel and sports-related goods. ”

The upcoming draft law on online shopping regulations has more benefits on the e-commerce environment than its bad influences. Here are some effects I think of:

  • Higher curbing and monitoring efforts from both government and e-commerce platforms, which means higher fixed costs and better sustainability in the long run. Taobao is spending more than $16 million a year to fight against counterfeit products right now.
  • Revolutions on rating systems on both merchants and customers.
  • Contraction effect on total online shopping transactions than without regulations. Benefit the luxury market after implementing laws.
  • Even higher expectations on merchants’ rating level when comparing similar goods, leading to a higher competitive market.
  • Refining the market volume to its natural state. There is some “irrational exuberates” in Chinese e-commerce market aroungd festivas such as Nov. 11th, Dec. 12th and Valentine’s Day. Serious regulation helps refine prices (more likely to raise prices), diminish excess demand and form solid and steady consumption market.
  • Gray-market goods include commodities sold in foreign area with cheaper prices, however triggering importing tax. Regulations would affect importing tax revenue and fixing economical efficiency.

 

Four state-owned banks’ reaction toward upcoming private force from Alibaba

Four state-owned banks’ reaction toward the upcoming private force from Alibaba

Since Alibaba has become the latest company other than traditional financial institutes that get permission to start up financial services like deposits and loans. The China Banking Regulatory Commission approved Alibaba’s request to its financial affiliated group. Though Alipay, which processes e-commerce payment to Taobao, the most well-known online shopping website under Alibaba, Alibaba intends to issue financial services only merely monetary fund products. The fist private bank under Alibaba would be headquartered in Hangzhou, a modern city near Shanghai.

Right now, Alipay has launched new services via smartphones aiming at typical services large banks monopolized for a long time., such as trading in hedging products, saving, transferring and provide high liquidity but relatively low risk funds as a competitor against saving account in banks. According to iResearch, a download tracking firm, Alipay Wallet has been downloaded more than 100 million times. These kind of mobile services have drawn scrutiny from regulators and opposition from powerful state-controlled lenders. Also the money-market fund behind Alipay has a daily average holding of $67 billion.

State-owned lenders showed negative attitude toward these emerging private banks, with most of them setting up caps on transferring money out of investors banking accounts to these private financial service sectors. These new policies indeed and hold part of funds within state-owned banks for a while, however, with pain of complaints and losing faith in traditional banks.

However, by limiting transaction volume is never an intelligent way to prevent investors from fleeting. In response to such moves, Alibaba founder Jack Ma has come out swinging.

“What determines success in the market shouldn’t be the monopolies and those with power, but the consumers.”

The emerging of private competitors are supported by China Banking Regulatory Commission (CBRC), since they hopes private banks will be in help with opening up more competitive economy.

Alibaba has moved forward to jointing hands with Shenzhen-based Bosera Asset Management to launch an online product that feeds into a Bosera gold exchange traded fund (ETF), as a successor of its most successful Yu’e Bao. After building faith in Alibaba’s financial product among investors, this new product is no longer performed as a free transferring one between Alipay account and one’s investment, but a more formal platform, where Alipay can formally launch more financial products on. So this new product is considered as a connecting and penetrating tool.

 

State-owned banks’ reaction toward the upcoming private force from Alibaba

Thesis: Four state-owned banks’ showed negative attitude toward the upcoming private force from Alibaba

Since Alibaba has become the latest company other than traditional financial institutes that get permission to start up financial services like deposits and loans, critics are raised from investors and traditional banks. The China Banking Regulatory Commission approved Alibaba’s request to its financial affiliated group. Though Alipay, which processes e-commerce payment to Taobao, the most well-known online shopping website under Alibaba, Alibaba intends to issue financial services only merely monetary fund products. The fist private bank under Alibaba would be headquartered in Hangzhou, a modern city near Shanghai.

Right now, Alipay has launched new services via smartphones aiming at typical services large banks monopolized for a long time., such as trading in hedging products, saving, transferring and provide high liquidity but relatively low risk funds as a competitor against saving account in banks. According to iResearch, a download tracking firm, Alipay Wallet has been downloaded more than 100 million times. These kind of mobile services have drawn scrutiny from regulators and opposition from powerful state-controlled lenders.  Also the money-market fund behind Alipay has a daily average holding of $67 billion.

State-owned lenders showed negative attitude toward these emerging private banks, with most of them setting up caps on transferring money out of investors banking accounts to these private financial service sectors. These new policies indeed helped hold part of funds within state-owned banks for a while, however, with pain of complaints and losing faith in traditional banks. However, by limiting transaction volume is never an intelligent way to prevent investors from fleeting. In response to such moves, Alibaba founder Jack Ma has come out swinging.

“What determines success in the market shouldn’t be the monopolies and those with power, but the consumers.”

The emerging of private competitors are supported by China Banking Regulatory Commission (CBRC), since they hopes private banks will be in help with opening up more competitive economy.

Alibaba has moved forward to jointing hands with Shenzhen-based Bosera Asset Management to launch an online product that feeds into a Bosera gold exchange traded fund (ETF), as a successor of its most successful Yu’e Bao. After building faith in Alibaba’s financial product among investors, this new product is no longer performed as a free transferring one between Alipay account and one’s investment, but a more formal platform, where Alipay can formally launch more financial products on. So this new product is considered as a connecting and penetrating tool.

Private banks in China is competing against state-owned commercial banks

Thesis: An upcoming strength- Private banks in China is competing against state-owned commercial banks

State-owned banks have monopolized power in China’s financial market, which are supported by government and China’s Bank Regulatory Commission. However, with an effort to compete against state-owned force, giant companies with large quantities of cash flows intend to share the cheese.

Alibaba is the latest company outside the financial sphere to get approval to start a bank in China. Before Alibaba, Tencent Holding Ltd., who is offering social networking application called WeChat on smartphones get permission setting up banking services in July 2014. With its more than 440 million users in WeChat, Tencent launched Licaitong, its online money market fund product similar to Yu’e Bao and started to offer investment products with return higher than state-owned vanilla bank saving accounts directly via its WeChat application. The section on WeChat application customers can participate in purchasing Licaitong is called Webank, leading to a private bank concept. Different from the deposit account, Tencent offers an impressive expected 7.3940% seven day annualized yield.

Both of Alibaba and Tencent own special and loyal customer base, which are more dependable than ordinary banking system customers. Customers who deposit in banks compare higher expected return to decide which bank to save in or whose deposit-like financial product to invest in, however, users in Tencent and Alibaba need they either Alipay or messaging functions, so customers in these private banks would have larger stickiness. Upon on that, Yu’e Bao is even more convenient by its easy use in online shopping than what Tencent offers, without need to say, it is a much improvement from saving accounts in state-owned banking system. The combination of financial service and social networking service is revolutionary and is expected to be a great power to compete against state-owned banks.

To absorb more users and spread its financial service concept in WeChat, Tencent stated a section called HongBao (gift packages) in its messaging application during Chinese New year. HongBao is a red gift package with money inside that elderly people give to younger relatives with best wishes during Chinese New Year. By this new section in WeChat, the concept of giving HongBao to people is generalized to be a way sending wishes such as “good luck on exams” or “get well soon” to anybody you are familiar with, not limited to relatives or younger people. That is a smart way letting people link their bank account to WeChat and transfer money in this application. Money accumulated via sending and receiving HongBao can be used in buying money market financial products in WeChat, or it will have no time value in WeChat account. Definitely, this is only the beginning how people connect their daily life with “banks”, private banks like Alibaba and Tencent would come up with more and more innovative ideas to attract and fix their users and shake the kingdom of state-owned banks.

Yule Bao, a new concept of investing on culture products via online purchase

Thesis: Yule Bao, a new concept of investing on culture products via online/mobile purchase.

Alibaba has introduced a new section in its famous Taobao Mobile application, as “Yule Bao”, which allow customers to invest their money in various development-phase culture products, such as video games, movies and TV shows. This new concept is revealed from early 2014, and has accumulated more than 300 thousand customers in this new investment method.

The Yule Bao is performed in the following measure. First, Alibaba selected a range of projects and listed in Yule Bao section. Users can get information of these projects, and choose which one/ones to invest in as well as the amount. After gathering enough funds, the funds will be carried out by Guohua Life Insurance, who will place the money in its own set of insurance funds, and subsequently invest them into the entertainment industries, mainly those selected projects.

What users can get out of the Yule Bao investment is a 7% expected annual return. Also, like lottery, some autographed posters, free movie tickets will be sent to users who invested in some special movies. Alibaba think there is a potential market in the entertaining derivatives. In the future, Alibaba is considering allowing discount prices for movie derivatives for those member users. Yule Bao also stimulates the participating willingness into entertainment industry and attracts people to interact with film producers. One promising idea of Yule Bao’s future is that one day majorities of users can share opportunities of deciding directors, heroes and heroines of films. This is unimaginable when the concept of crowd fund in culture industry is not introduced by Alibaba. Alibaba is now thinking of adding voting rights to Yule Bao, as one invested in some competing TV show program, and then those users may have voting rights for players they like.

Apart from money Alibaba gets from the difference of rate of returns between it get from the entertainment industry and what it paid back to their users, Alibaba is accumulating knowledge of customer habits, consumption behavior data and trends how investors choosing entertainment products.

There are some obstacles in Yule Bao’s future path. As one of the online purchasing sections in Taobao application, People’s bank of China, the central bank of China has proposed a set of regulations to limiting its boosting development. Some regulations are set for the capping of monetary fund transaction via online method each day (RMB 5000) and for each month (RMB 10,000).

There is a basic difference of investment in culture industry and ordinary monetary fund: it is untrue that more money in the pool means more returns. Such as the first term of Yule Bao fund gathering, the first pool of projects was 4 movies and their derivative products. The total fund cap is to cover producing expenditure advertising expenses and payment for actors and directors. So that there is an upper bound for the money gathering. When the too much money is invested in, the exceeding money will decrease the rate of return. It also relates to the entering money for each share of investment. Due to the philosophy of entertaining the mass and enlarging the participation, the too-high entering money for each share of investment will lead to an oligopoly situation, where several giant investors occupy the investing space. Then there will be no difference between the regular film investment and Yule Bao.

[Revised]Investment in B2C market in China and India

Thesis:The investors boosted portfolio in India e-commerce startups should be more rational.

Last year is a significant year for India startups, especially e-commercial retailers, as venture capitalists sank $4 billion into India market to support 300 “promising” new entrepreneur, which was almost doubled the amount invested in 2013 and 14 times more than it a decade ago.

From my point of view, I think the most significant reason of this soaring investment is owing to the successful example of alibaba in China. However, the huge potential e-commercial market in China is distinct from what in India. From information I gathered in “Venture Money Floods Into Indian Startups” from WSJ, I think there are several reasons that increasing your portfolios in Indian startups is irrational.

  • Most of the e-commercial websites in India has gained no profits and are not expected to obtain any returns in a few years ahead, such as one investor interested online furniture-shopping site FabFurnish.com. This website is considering raising another round of fund exceeding $20 million.
  • Due to the exceeding supply of investment in these startups, some funds are inefficient since companies don’t need this extra money in the initiating phase. As we know from economic knowledge, every dollar added into the investment would decrease the marginal return of the investment portfolio, simultaneously, afford the significant opportunity cost in other market segments.
  • Internet penetration against population in India is notably low, at a 17% rate, less than one fifth of it of American’s; the online shoppers ratio is also lagging from the worldwide level, only 2% of India people consume online, which is 1/25 of it of the US’s. It takes time to expand Internet into families and introduce concept of virtual shopping. People costumed in shopping in real stores may find pay the bills several days before you obtain the commodities had to accept and trust.
  • The enormous investment in recently years creates bubbles in some companies market values. Flipkart Internet Pvt., one e-commerce company now worth $11 billions, more than Dropbox in the US. Frothy values leads to high-risk situations.

From my perspective, the rational choice of increasing portfolios in e-commerce segment is keeping the investment in Chinese area. The success in Alibaba and JingDong are good sign of the boost of e-commerce market in China. The policy maker’s attitudes in these areas are significantly different between India and China. The FDI (Foreign direct investment) policy on India retail sale confined foreign investment in B2C market, even though the openness of FDI in B2B market in India was 100%, greatly benefited the B2B e-retail market in India. Once new government introduces FDI in B2C, the following FDI caps and limits on the percentage of sourcing from domestic manufacturers is inevitable.

However, the Chinese State Council issued reports calling for promotions of e-commerce and logistics last year, which contribute to the success of Alibaba IPO issuing.

Some may argue that India has great Internet develop potentials since the penetration is low. However, due to the comparison of e-commerce sale in India and China in the following figure, we can clearly see that China has more than 10 times sale amount of indian’s and China is estimated has a higher increasing rate in the year 2015-2016 than it of Indian.

Screen Shot 2015-03-30 at 6.22.14 PM

Screen Shot 2015-03-30 at 6.22.21 PM

To be more rational, both B2C markets have risk from international B2C platforms, which would erode domestic online shopping demand and transfer it to importing demand. As amazon opened its direct shipping to Asian areas including China and India, it delivers un-substitutable commodities from international retails and will definitely drag down the net return of investment in China and Indian e-commerce segments.

Regulation on Chinese E-commerce rating and credibility

Thesis: It is time for Chinese Minister of Commerce to think about regulations on e-commerce rating and credibility

China has become a giant in e-commerce sales, attracting more attentions on the online shopping regulations and monitoring. The online retail sales in China reached $296.57 billion in 2013, 13% more than U.S. e-commerce sales of $262.51 billion.

Also as I mentioned in the last blog post, the total B2C e-commerce sale in China reached 110.04 billions of dollars while the worldwide statistic is 1233 billion, in which China occupied 8.92% of the total transactions.

However, the boosting online consumption market reveals its drawbacks in an acceding rate, due to the virtual stores rather than real stores in the online platforms. One significant concern is the falsely boosting customer reviews and questionable credibility of merchants. Some merchants who providing high resemblance counterfeit products need more credible reviews to attract customers and dilute the bad quality reviews. How to distinguish these cheating merchants is a crucial task for regulating department of these online platforms. Some detecting techniques require data-mining skills to analysis the frequently pop-up IP address and fake IP information. Also some special goods like cosmetic products, leather bags and household products are the easiest segments that one can find some fake merchants.

Chinese Ministry of Commerce announced yesterday that a draft law on regulating online merchants standards and reducing counterfeit products on e-commerce market would be initiated soon. Stiff penalties and fines, raising requirement level for opening up stores online are possible legal constraints in the coming draft law. Just like “Alibaba only allowed brands and their authorized resellers to open shops in popular categories of its Tmall site. The rule applies to cosmetics, shoes and bags, apparel and sports-related goods. ”

The upcoming draft law on online shopping regulations has more benefits on the e-commerce environment than its bad influences. Here are some effects I think of:

  • Higher curbing and monitoring efforts from both government and e-commerce platforms, which means higher fixed costs and better sustainability in the long run. Taobao is spending more than $16 million a year to fight against counterfeit products right now.
  • Revolutions on rating systems on both merchants and customers.
  • Contraction effect on total online shopping transactions than without regulations. Benefit the luxury market after implementing laws.
  • Even higher expectations on merchants’ rating level when comparing similar goods, leading to a higher competitive market.
  • Refining the market volume to its natural state. There is some “irrational exuberates” in Chinese e-commerce market aroungd festivas such as Nov. 11th, Dec. 12th and Valentine’s Day. Serious regulation helps refine prices (more likely to raise prices), diminish excess demand and form solid and steady consumption market.
  • Gray-market goods include commodities sold in foreign area with cheaper prices, however triggering importing tax. Regulations would affect importing tax revenue and fixing economical efficiency.

 

Investment in B2C market in China and India

Thesis:The investors boosted portfolios in India e-commerce startups should be more rational.

Last year is a significant year for India startups, especially e-commercial retailers, as venture capitalists sank $4 billion into India market to support 300 “promising” new entrepreneurs, which was almost doubled the amount invested in 2013 and 14 times more than it a decade ago.

From my point of view, I think the most significant reason of this soaring investment is owing to the successful example of Alibaba in China. However, the huge potential e-commercial market in China is distinct from what in India. From information I gathered in “Venture Money Floods Into Indian Startups” from WSJ, I think there are several reasons that increasing your portfolios in Indian startups is irrational.

  • Most of the e-commercial websites in India has gained no profits and are not expected to obtain any returns in a few years ahead, such as one investor interested online furniture-shopping site FabFurnish.com. This website is considering raising another round of fund exceeding $20 million.
  • Due to the exceeding supply of investment in these startups, some funds are inefficient since companies don’t need this extra money in the initiating phase. As we know from economic knowledge, every dollar added into the investment would decrease the marginal return of the investment portfolio, simultaneously, afford the significant opportunity cost in other market segments.
  • Internet penetration against population in India is notably low, at a 17% rate, less than one fifth of it of American’s; the online shoppers ratio is also lagging from the worldwide level, only 2% of India people consume online, which is 1/25 of it of the US’s.
  • The enormous investment in recently years creates bubbles in some companies market values. Flipkart Internet Pvt., one e-commerce company, now worth $11 billions, more than Dropbox in the US. Frothy values lead to high-risk situations.

From my perspective, the rational choice of increasing portfolios in e-commerce segment is keeping the investment in Chinese area. The success in Alibaba and JingDong are good sign of the boost of e-commerce market in China. The policy maker’s attitudes in these areas are significantly different between India and China. The FDI (Foreign direct investment) policy on India retail sale confined foreign investment in B2C market, even though the openness of FDI in B2B market in India was 100%, greatly benefited the B2B e-retail market in India. Once new government introduces FDI in B2C, the following FDI caps and limits on the percentage of sourcing from domestic manufacturers is inevitable.

However, the Chinese State Council issued reports calling for promotions of e-commerce and logistics last year, which contribute to the success of Alibaba IPO issuing.

Some may argue that India has great Internet develop potentials since the penetration is low. However, due to the comparison of e-commerce sale in India and China in the following figure, we can clearly see that China has more than 10 times sale amount of indian’s and China is estimated has a higher increasing rate in the year 2015-2016 than it of Indian.

Screen Shot 2015-03-30 at 6.22.14 PM

Screen Shot 2015-03-30 at 6.22.21 PM

To be more rational, both B2C markets have risks from international B2C platforms, which would erode domestic online shopping demand and transfer it to importing demand. As amazon opened its direct shipping to Asian areas including China and India, it delivers un-substitutable commodities from international retails and will definitely drag down the net return of investment in China and Indian e-commerce segments.

[revised] liquidity crisis

Thesis: Liquidity crisis is worth paying attention to.

What are liquidity problems in securities market?

Generally, the concept of liquidity in securities market means the easiness to sell or buy an asset urgently in the market without losing money from its market price. If a market maintains a high or sufficient liquidity, then investors can trade assets in the market freely with no necessities to hold them to maturity. Also, it is consistent to less wealth loss in the transaction in return of immediate cash. Confidence in the market, large participant activities, willingness to interact among private investors and financial institutions, macroeconomic and prudential policies are aspects affect such liquidity. Market liquidity reflects financial conditions and business cycle.

Lower market liquidity, say higher bid-ask spreads, increases the tension in the securities market. In the famous paper “Market Liquidity As A Sentiment Indicator” written by Malcolm Baker and Jeremy C. Stein, these two economists used models to prove that the higher liquidity, (or lower bid-ask spreads, lower price impact of trade, higher share turnover) coincide with higher stock returns, which in turn result in a more plausible outcome, larger attraction for investors to participate in security market, leading to even sufficient liquidity.

What are liquidity indicators? What do they indicate?

As some typical liquidity indicators, the trading volume of U.S. corporate bonds, the quantities of net broker-dealer positions and the holdings of corporate bonds kept declining since the 2008 financial crisis, co-occurred with the liquidity crisis. Those indicators are at the relatively low position right now relative to their record in US in the past ten years, due to the Wall Street Journal credit market news, especially the inventories brokers held. Banks from worldwide, such as from Bank of England, reflected this phenomenon recently. Some may held opposite opinion by stating the quantitative easing methods carried out by Europe and Asia these years, however, the global co-header of credit at J.P. Morgan Chase & Co. Mr. America said that

“If a lot of investors are trying to do the same thing at the same time, then the market won’t feel liquid regardless of the environment.”

Indeed, reactions in the same direction tighten the liquidity, even though those actions lift the market participations in the other side. Block trades in stock market are typical examples that cause panic and less liquidity.

By the Bank of International Settlements (BIS) most recently released research today, we can conclude that based on the latest BIS statistics, such as global credit in US dollars to the non-financial sectors, total domestic and cross-border credit to non-banks and global real short-term interest rate, the recovery in banking systems contribute to a great channel for global liquidity: the bank lending channel. However, since investors are moving in the same directions, the liquidity in the future will persist for longer time and have heavier impact.

In addition to paying attention to the possible liquidity crisis in the future, we should know what are the general measures to deal with controllable liquidity shortage. Long-term repurchase operation carried out by Bank of England in the last financial crisis was an effective measure to solve the problem. The central bank accepted a broader range of collaterals for banks to borrow against at its regular cash auctions to obtain more liquidity into the banking system. Also swaps for assets with shorter term and higher liquidity with burdensome long-term assets would be allowed as a special liquidity scheme in tension scenarios.