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What China Central Bank Learned From Past Credit Crunches

June 28 (Bloomberg) -- In signaling this week that it was prepared to inject liquidity into the markets, the People’s Bank of China brought the country’s financial system much needed relief that a “Lehman moment” might be avoided.

The current credit crunch, in which the central bank has refused to act as the lender of last resort, differs markedly from two previous episodes, in the late 1980s and early 1990s. It also shows that China’s approach to macroeconomic governance has evolved: Its leadership no longer relies solely on political and administrative controls, and is allowing market forces take a greater role.