Social financing plunges amid tight liquidity
By Feng Jianmin |
February 18, 2012, Saturday
|
Print Edition
Print Edition
CHINA'S social financing nearly halved in January from a year earlier, reflecting the authorities' tight monetary and regulatory stance.
Social financing, including loans, bank acceptance bills, corporate bonds and equity financing, reached 995.9 billion yuan (US$151.7 billion) in January, 800.1 billion yuan less than a year ago, the People's Bank of China said in a statement yesterday.
That included 738.1 billion yuan in bank lending in January, the lowest since January 2008.
"One reason for the decline is tight liquidity and strict control on the loan-to-deposit ratio," said E Yongjian, an economist of the Bank of Communications. "The other is increasing inspection of fundraising activities off the balance sheet."
Yuan Lin, an analyst at BOC International, attributed the decrease to weaker demand for loans in January, partly because of short working days. Yuan also expected monthly bank lending to remain at 700-800 billion yuan.
The central bank expected M2, the broadest measure of money supply, to grow at 14 percent this year, slightly higher than last year's 13.6 percent.
Economists said they don't expect a huge relaxation in monetary policies this year.
Liu Mingkang, former chairman of the China Banking Regulatory Commission, yesterday said monetary policies will not be loosened greatly this year as China faces difficulties from overseas.
Besides, the widely-expected slowdown in China's economic growth will limit money supply.
"If the gross domestic product rises between 7 and 8 percent, the increase in money supply will not exceed last year's," Liu said. "It is not possible now to counter the financial crisis by printing significant amount of money."
Amid the prudent outlook, the CBRC ordered the strengthening of inner risk control for small and medium-sized banks.
"Economic uncertainties are increasing, and the regulator should urge small and medium-sized banks to stick to the bottom line of their risk control," CBRC Chairman Shang Fulin said in a statement, while encouraging the banks to serve micro and small enterprises.
Social financing, including loans, bank acceptance bills, corporate bonds and equity financing, reached 995.9 billion yuan (US$151.7 billion) in January, 800.1 billion yuan less than a year ago, the People's Bank of China said in a statement yesterday.
That included 738.1 billion yuan in bank lending in January, the lowest since January 2008.
"One reason for the decline is tight liquidity and strict control on the loan-to-deposit ratio," said E Yongjian, an economist of the Bank of Communications. "The other is increasing inspection of fundraising activities off the balance sheet."
Yuan Lin, an analyst at BOC International, attributed the decrease to weaker demand for loans in January, partly because of short working days. Yuan also expected monthly bank lending to remain at 700-800 billion yuan.
The central bank expected M2, the broadest measure of money supply, to grow at 14 percent this year, slightly higher than last year's 13.6 percent.
Economists said they don't expect a huge relaxation in monetary policies this year.
Liu Mingkang, former chairman of the China Banking Regulatory Commission, yesterday said monetary policies will not be loosened greatly this year as China faces difficulties from overseas.
Besides, the widely-expected slowdown in China's economic growth will limit money supply.
"If the gross domestic product rises between 7 and 8 percent, the increase in money supply will not exceed last year's," Liu said. "It is not possible now to counter the financial crisis by printing significant amount of money."
Amid the prudent outlook, the CBRC ordered the strengthening of inner risk control for small and medium-sized banks.
"Economic uncertainties are increasing, and the regulator should urge small and medium-sized banks to stick to the bottom line of their risk control," CBRC Chairman Shang Fulin said in a statement, while encouraging the banks to serve micro and small enterprises.
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