<중>Central Bank Orders Financial Institutions to Expand Lending

Chinese financial authorities have ordered financial institutions to expand lending to support economic recovery.

[Image source=Yonhap News]

On the 20th, the People's Bank of China, the country's central bank, announced that it held a video conference on the 18th with the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission to discuss measures for real economy development and financial crisis prevention.

The People's Bank of China stated, "Major financial institutions must take responsibility and increase lending, and large state-owned banks should continue to play a pillar role."

It also emphasized, "Regulatory authorities and financial institutions must mobilize various policy tools to resolve local government debt crises," adding, "Crisis monitoring and control mechanisms must be strengthened."

In particular, it stressed the importance of firmly maintaining the margin to prevent a systemic crisis.

It appears that the central bank requested cooperation from banks due to concerns that the debt default crisis of real estate developer Biguiyuan could spread to the financial sector.

The People's Bank of China will hold a meeting on the 21st to decide the Loan Prime Rate (LPR), which effectively serves as the benchmark interest rate.

Experts believe that the authorities are likely to lower the LPR to increase liquidity.

This content was produced with the assistance of AI translation services.