SHANGHAI (Reuters) – Encouraging China’s banks to actively increase support for the real economy, rather than relying on authorities’ orders to boost lending, is the key to improving the supply of credit in the economy, a central bank official said on Monday.
Problems with timely capital replenishment, bank liquidity gaps and poor rate “transmission” are three major constraints on banks’ supply of credit, Sun Guofeng, head of the People’s Bank of China’s monetary policy department, wrote in a commentary in the PBOC’s China Finance magazine.
Sun - PBOC - Steps - Constraints - Credit
Sun said the PBOC is taking steps to relieve constraints on credit availability in an attempt to ensure looser monetary policy is reflected in looser credit conditions.
“If capital is not replenished in a timely manner it can restrict reasonable credit availability for the next stage” of lending, he wrote. He said the PBOC is further accelerating the push for banks to issue perpetual bonds to replenish capital.
Sun - Changes - Exchange - Situation - Meant
Sun said “changes in the foreign exchange situation” meant that some banks face large mid-and long-term...
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