Bank lending for ‘real economy’ key to boost China growth, says central bank
China should encourage its banks to support smaller, private firms in the real economy, says official
Shanghai — China should encourage its banks to support smaller, private firms in the real economy, rather than forced lending or policies such as quantitative easing, a state newspaper quoted a central bank official as saying on Saturday. "The central bank doesn't wish to use administrative methods to require banks (to lend)," Sun Guofeng, head of the monetary policy department at the People's Bank of China (PBOC), told the Financial News, a bank publication. "It wants to establish positive encouragement mechanisms though monetary policy tools to encourage banks to actively increase their support for the real economy, especially toward smaller and privately-owned firms," Sun said. The comments come a month after Sun wrote a commentary in which he argued that problems with timely capital replenishment, bank liquidity gaps and poor rate "transmission" are three major constraints on banks' supply of credit. In the interview with the Financial News, Sun said monetary policy transmission...
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