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Global Times: Chinese Central Bank Requires Enhanced Liquidity Management

On June 24, Global Times reported that the Chinese central bank issued a regulatory requirement that all financial institutions, including commercial banks, must apply more control over liquidity management. The central bank statement suggested that the purpose of the new requirement is to stabilize the currency environment and to improve the handling of an increasingly volatile financial market, especially at the mid-year time point. The central bank also asked all banks to “pay careful attention” to the market trend and to maintain an adequate reserve level. Large commercial banks were asked to maintain good control over risks as well as to cooperate with the central bank in the effort to stabilize the market. The central bank statement mentioned that banks should set reasonable profit goals and loans should be used mainly to support the growth of the real economy.
Source: Global Times, June 24, 2013