china\s banks warned to be prudent in setting rates
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

China's banks warned to be prudent in setting rates

Arab Today, arab today

Arab Today, arab today China's banks warned to be prudent in setting rates

Beijing - AFP

Chinese banks took control of setting loan interest rates on Saturday as the country's central bank warned them to be prudent and alert to credit risks. The People's Bank of China (PBoC) announced on Friday that it was lifting controls on loan interest rates effective on Saturday, framing the move as a way to lower financing costs for businesses and support China's long-term economic restructuring. In a statement on its website on Saturday, the central bank said that loan interest rates should be set "on the basis of market supply and demand", while taking account of "credit risk". "Financial institutions must actively adapt to the market price-setting method" for fixing the rates, it said. The central bank also told institutions to "construct improved pricing mechanisms", raise levels of service, maintain normal lending and "strengthen interest rate risk management". Under the reform, the central bank removed a lower limit on lending rates, which had previously been set at 70 percent of its fixed benchmark rate. But it said it would not adjust current restrictions on deposit and mortgage rates, the latter in order to promote "healthy development of the housing market". The move to give banks control of loan interest rates comes as growth in the world's second-largest economy has slowed this year, setting off alarm bells among analysts about prospects for the rest of 2013. Gross domestic product expanded at 7.5 percent in the second quarter, down from 7.7 percent in the first quarter and 7.9 percent from the last quarter of 2012. The figures this year have so far proved disappointing after the 7.8 percent growth seen in 2012 -- itself the worst in 13 years. Analysts described the measure as a positive and symbolic step toward liberalisation of China's still highly controlled financial system. "The government is signalling a commitment to letting market forces play a greater role in determining financial conditions," economists at Capital Economics wrote in a report Friday. "In the long-run this should encourage lenders to pay more attention to credit risks and improve the allocation of credit." Cao Yuanzheng, chief economist at the Bank of China, cautioned that banks need more time to gear up for any further freeing up of the system, such as the removal of a cap on deposit rates, the state-run China Daily newspaper reported Saturday. "The liquidity crunch in the interbank market in June has shown that banks haven't equipped themselves with mature liquidity management," Cao said, according to the newspaper. "They are not ready for more substantial deregulation on interest rates." A cash crunch spooked Chinese financial markets late last month before the PBoC, which had ordered banks to strengthen liquidity management, moved to calm nerves with an offer of support. The brief turmoil underscored rising concerns over excessive lending by banks and other weaknesses in China's financial system, including opaque non-bank forms of lending, often called "shadow finance".  

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

china\s banks warned to be prudent in setting rates china\s banks warned to be prudent in setting rates

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

china\s banks warned to be prudent in setting rates china\s banks warned to be prudent in setting rates

 



GMT 10:06 2012 Saturday ,28 July

Querrey advances at ATP LA Open

GMT 21:15 2017 Thursday ,01 June

Trump condemns deadly Kabul explosion

GMT 02:15 2017 Thursday ,24 August

Is your country on the Qatar free entry list of 80?

GMT 19:48 2016 Monday ,03 October

Controversial boxing champ Tyson Fury retires

GMT 08:20 2015 Tuesday ,08 December

PC market woes show no sign of easing

GMT 17:27 2017 Tuesday ,25 April

20 Yemeni soldiers killed, injured in explosion

GMT 11:52 2017 Saturday ,30 December

OIC condemns Mar Mina Church attack

GMT 00:03 2017 Saturday ,25 March

Arab Meeting to Examine Anti-Corruption Methods

GMT 13:12 2017 Thursday ,20 April

Deputy premier meets Arab League chief

GMT 14:13 2014 Friday ,10 January

Opel Astra GTC

GMT 18:27 2016 Tuesday ,02 August

Turkish Foreign Minister arrives in Islamabad

GMT 11:27 2016 Tuesday ,13 December

Saudi woman arrested for challenging social norms
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday