China Central Bank Tightens Loan, Deposit Measurement As Shadow Banking Surges – Yahoo Finance

The steps the People’s Bank of China (PBOC) are taking also show that its recent tweak to how loan-to-deposit ratios banks are calculated was not a form of monetary easing, but instead a preliminary step to applying further pressure on shadow banking. According to a transcript of an official briefing to domestic media seen by Reuters on Thursday, the PBOC will include deposits by non-deposit-taking institutions made in accounts at banks deposit-taking institutions in calculations of deposits, and will include lending by deposit-taking institutions to non-deposit-taking institutionsin loan calculations. BROKERAGE MARGIN DEPOSITS The transcript made particular mention of margin deposits from brokerages at banks. Regulators have signalled concern that a massive stock market rally set off in November is at risk of over-heating, given large quantities of cheap leverage provided through brokerage margin accounts. The transcript quoted comments by Sheng Songcheng, the head of the PBOC’s statistics department, during a question-and-answer session to which foreign media were not invited. “The changes in calculating deposit and loan items are aimed at making (Chinese standards) gradually be in line with usual international practices,” Sheng was quoted as saying. “As these changes are aimed at more accurately reflecting the reality of social deposits loans, as well as liquidity conditions, people should not read too much into them on the policy front.” Despite the crackdown, off-balance sheet lending led by entrusted loans and trust loans shot up in December, official data showed on Thursday, even as traditional yuan loans fell far short of expectations.
For the original version of the article including any supplementary images or video, visit http://finance.yahoo.com/news/china-central-bank-tightens-loan-052641460.html

Advertisements
Standard

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s