China's central bank launches new credit supply measure

The People’s Bank of China (PBoC) has unveiled a new measure to better gauge the total supply of credit to the country’s economy, Dow Jones reported. The new measure, called "total social financing," should offer a more accurate picture of financial conditions than the measure of new renminbi loans previously employed. New loans will be just one component of the new, broader system, which will take into account credit sources such as loans from trust companies, corporate bonds, and equities of non-financial companies. In December, Fitch Ratings released a report estimating that the old system failed to account for around US$455 billion in off-balance sheet lending. The newly-announced measure indicates that there was a total finance supply of US$2.2 trillion in 2010, around US$960 billion of which was extended by non-bank financial institutions.