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Category Archives: Banking

China’s Central Bank to Cut Banks’ Reserve Requirement Ratio to Support Economy

The People’s Bank of China (PBOC) said it will cut the amount of cash lenders need to keep in reserve, injecting about 500 billion yuan ($70 billion) into the financial system to keep liquidity ample and support sectors and small companies “severely impacted” by the Covid-19 pandemic.

PBOC will lower financial institutions’ reserve requirement ratio (RRR) by 25 basis points, or 0.25 of a percentage point, December 5, according to a statement Friday on its website. The weighted average RRR of financial institutions will fall to around 7.8%. It is the second reduction this year; in April the ratio was also cut by 25 basis points, releasing around 530 billion yuan of liquidity into the financial system.


Source : Caixin

China’s Central Bank Urges Banks to Maintain Stable Property Financing

China’s financial regulators have asked banks to stabilize lending to property developers and construction firms, the latest effort by policymakers to turn around the real-estate crisis and bolster economic growth.

Authorities support the “reasonable” extension of existing real estate development loans and trust loans, according to a statement posted on the People’s Bank of China’s website after a Monday meeting with commercial banks. The gathering was jointly organized by the central bank and the banking regulator.

The regulators reiterated that the “reasonable” demand of home buyers for mortgages will be met. A key financing support program must be “used well” to help private property developers sell bonds, while legal protection and regulatory policy support for special loans aimed at ensuring housing-project delivery will be improved to promote the stable and healthy development of the market, the statement said.

The call is the latest in a slew of actions taken by the government to try to stop the more-than-yearlong slump in the real estate market that’s dragging down China’s economic growth and undermining local-government income. Bond defaults by cash-strapped developers have sent shockwaves across the financial markets, while delays in property-project delivery have driven homebuyers to stop mortgage payments in protest.

In a possible sign of willingness to shift away from the previous tightening stance on the real estate sector, PBOC Governor Yi Gang emphasized Monday that the industry is critical for the economy. “The property sector is linked to many upstream and downstream industries, and its healthy operating cycle is significant for the economy,” Yi said at a financial forum in Beijing.

Meanwhile, the PBOC is planning to provide 200 billion yuan ($28 billion) in interest-free relending loans to commercial banks through the end of March, 2023, in a move to support them to provide matching funds for stalled property projects, China Business News reported, citing the central bank’s meeting with commercial banks on Monday.

Adding to the positive messages sent by the authorities, Yi Huiman, chairman of the China Securities Regulatory Commission, said at the same event that his agency will support property developers’ reasonable bond financing needs and support mergers and acquisitions in the sector.

Support Package

The main points from Monday’s meeting are similar to a 16-point package authorities rolled out earlier this month to help embattled developers, who have at least $292 billion of onshore and offshore borrowing maturing through the end of next year. The push followed regulators’ orders for banks to dole out hundreds of billions of yuan in financing for developers in the remainder of this year.

The remarks by Yi Gang are “a rare recognition of the property sector’s irreplaceable significance” by a top financial official, according to Lu Ting, chief China economist at Nomura Holdings Inc. in Hong Kong. The government’s recent supportive policies “demonstrate that Beijing is willing to reverse most of its financial-tightening measures,” he added.

At the meeting on Monday, the PBOC and the China Banking and Insurance Regulatory Commission also urged banks to expand medium- and long-term lending to help policy bank financing drive effective investment. Credit demand from manufacturers and service providers should be supported via the special relending loan program for equipment upgrading, the regulators added.

Yi said at the forum that the outstanding size of the relending programs targeting sectors such as technology innovation, transport and logistics and equipment upgrading is about 3 trillion yuan ($419 billion), adding they will be ended after policy goals are reached.

Stocks Down

A Bloomberg gauge of Chinese developers’ stocks ended the day 2% lower, after sinking as much as 4% in the morning. The Shanghai Stock Exchange Property Index closed 0.5% lower after earlier being down 2.7%.

PBOC Deputy Governor Pan Gongsheng and CBIRC Vice Chairman Xiao Yuanqi made comments at the Monday meeting, which was attended by heads of institutions including the major state-owned banks, joint stock lenders, and the branches of the central bank and the banking regulator, according to the statement.


Source : BNN Bloomberg


Charts: Foreign Central Banks Continue to Sell U.S. Treasuries

Japan and China Biggest Monthly Treasury Dump On Record

Source : Global Macro Monitor

Chart: China Bank Loans Drop to Worst Since 2017 As Economy Slows

Household Mortgages Continued to Stagnate

Source : Bloomberg

Chart: China Banks Are Now Valued Like US Peers at Depths of 2008 Crash

Source : Bloomberg

Chart: China PBOC Ends Stronger-than-expected Yuan Fixing

Source : Bloomberg

Deputy Chinese Central Bank Governor Probed for Corruption

A deputy governor of China’s central bank is under investigation for serious violations of law and discipline, a euphemism for corruption, the nation’s top anti-graft watchdog announced last Saturday.

Fan Yifei is the first senior Chinese finance official placed under a graft investigation since the Communist Party of China wrapped up the 20th National Congress and named a new party leadership lineup.


Source : Caixin


人民银行党委召开会议 坚决拥护中央对范一飞涉嫌严重违纪违法进行审查调查的决定

2022年11月6日下午,人民银行党委书记、副行长郭树清同志主持召开党委会议,党委副书记、行长易纲同志及各位党委委员出席。会议一致认为,中央纪委国家监委对范一飞涉嫌严重违纪违法进行纪律审查和监察调查,充分体现了以习近平同志为核心的党中央深入推进全面从严治党、以零容忍态度惩治腐败的坚强决心和坚定意志,凸显了我们党勇于自我革命的鲜明品格,释放了反腐败斗争一刻不停,永远吹冲锋号的强烈信号。人民银行党委坚决拥护中央决定。

会议要求,人民银行系统各级党组织和全体党员干部要深刻反思,以案为鉴,全面加强党的政治建设,深刻领悟“两个确立”的决定性意义,切实增强“四个意识”,坚定“四个自信”,做到“两个维护”,坚定理想信念,加强党性修养,把稳政治方向。要深刻认识党风廉政建设和反腐败斗争的长期性、复杂性、艰巨性,保持永远在路上的政治清醒和坚定,持之以恒推进全面从严治党,坚持不敢腐、不能腐、不想腐一体推进,依法行政,廉洁从政。要深入学习贯彻党的二十大精神,不折不扣将党中央关于经济金融工作的各项决策部署落到实处。


Source : 中国人民银行

Chart: Hong Kong Bank Loan and Deposit MoM (%) in 2022

Source : HKMA

Chart: 香港銀主盤209個 逼金融海嘯水平

Source : 明報

China’s Central Bank Launches US$28 bln Loan Facility to Support Equipment Upgrades

China’s central bank said on Wednesday it has set up a relending facility worth more than 200 billion yuan ($27.59 billion) to help manufacturers and other companies upgrade their equipment, as part of a push to revive flagging demand.

The People’s Bank of China (PBOC) said in a statement that it will provide low-cost funds to financial institutions and guide them to lend to firms to support such upgrades.

The loans will be issued on a monthly basis, and the interest rate for qualified firms will be no higher than 3.2% from Sept. 1, 2022 to December 31, 2022, the central bank added. China’s one-year loan prime rate (LPR) is currently 3.65%.

The lending facility will support sectors including education, health, culture, tourism and sports, electric vehicle chargers, urban underground facilities, new infrastructure and industrial digital transformation, the central bank said.

The PBOC has increasingly relied on structural, or targeted policy tools, including low-cost loans, to support the slowing economy, as it faces limited room to cut interest rates for fear of fuelling capital flight and inflation.

The PBOC has rolled out relending facilities to support the transport, logistics and storage sectors that have been hit hard by COVID-19, as well as carbon emission reduction, tech innovation and elderly care.

On Sept. 14, China’s cabinet announced steps to support equipment upgrades by companies, extending a raft of measures to bolster the COVID-ravaged economy.


Source : Reuters