Central bank moves to limit lending
20 November 2007
China's central bank has required all Chinese banks to ensure that their outstanding loans at the end of 2007 do not exceed October 31 levels, though the implications of this move are not clear, Reuters reported. Though the central bank typically tries to limit lending at the end of the year, this move represents an aggressive strategy, sources said. One industry expert said the People's Bank of China did not have the authority to issue set specific limits on bank lending, since most banks are no longer completely state-owned. The China Banking Regulatory Commission has not issued any specific lending targets, according to an official at the banking regulator. Sources said the new requirement is a form of "window guidance" and does not constitute a complete halt in lending. Last week, the central bank raised the reserve requirement for banks in an effort to reduce excessive liquidity.
Bookmark and Share:
