China Banks Rush to Raise Funds After Cash Crunch Spooks Market
- Issuance of short-term bank debt set to hit all-time high
- Some financial firms had to pay 50% overnight rate last week
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Chinese banks have ramped up their borrowing of short-term funds, a sign that fears of a cash crunch still loom large even as Beijing sought to calm traders after a recent liquidity squeeze.
Onshore lenders this week doubled their issuance of so-called negotiable certificates of deposit, a form of debt with maturities from one to 12 months, to more than 1 trillion yuan ($137 billion). That’s the largest weekly issuance of such debt on record, according to data compiled by Bloomberg.