China Wants a Win Where Draghi and Carney Fell Short
- Analyst says smaller companies have long been ‘undernourished’
- Reserve cut ‘basically means free money’ for small banks: RHB
PBOC Embraces ECB and BOE Strategy
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A blockage in credit to particular parts of China’s economy has spurred the central bank to embrace a strategy used by the European Central Bank and the Bank of England -- while aiming for greater success.
With broad M2 money supply growth forecast to have lingered at a record-low 8.9 percent in September as policy makers push to curb over-indebtedness in some parts of the economy, the People’s Bank of China is now trying to free up funds for others, like small businesses and agriculture. From January, banks doing enough of that sort of lending will get a reduction in required reserves of up to 1.5 percentage point, from 17 percent now for large lenders.