Financial China

Bank regulator blinks on credit tightening

  • Published 17 Sep 2009

China’s bank regulator has eased its stance on credit tightening, showing that – for now - GDP growth trumps monetary discipline in Beijing’s hierarchy of priorities.

It was always clear (CC Aug 6th Financial China) that if push came to shove and Beijing’s monetary authorities had to choose between delivering economic growth or monetary discipline – they would choose growth. So when push did come to shove early this month – amid falling Shanghai share prices and a litany of behind-the-scenes complaints from senior bankers – the China Banking Regulatory Commission (CBRC) blinked. The government’s chief monetary discipline hawk softened its stance on proposals aimed at tightening banks’ capital adequacy ratios (CAR) to limit loan growth.

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