Guonan Ma: Tweaking China’s loan-deposit ratio rule

Tweaking China’s loan-deposit ratio rule
– highlights the need to revamp the country’s outdated banking regulatory framework ahead of full interest rate liberalisation
by Guonan Ma on 3rd September 2014

In the wake of the latest easing of Chinese monetary policy, the CBRC, China’s banking regulator, has recently modified a few details of how it calculates the bank loan/deposit ratio, which is currently capped at 75 percent by the country’s banking law. This move, in combination with an easier monetary policy stance, aims to ease the tight Chinese financial conditions, allocate more credit to Chinese agriculture and SMEs, and adapt China to its rapidly changing financial landscape.

Read more at Bruegel…

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