China Investment Corporation (CIC), the country’s sovereign wealth fund, injected US$20 billion into policy lender China Development Bank (CDB) on December 31, the Wall Street Journal reported. The newspaper suggested that the injection was timed so that CDB could include the extra funds in its accounting for 2007. The People’s Bank of China announced the transaction through its website, saying that CIC’s funds would increase CDB’s capital-adequacy ratio and help its operations become completely commercialized. CDB’s capital-adequacy ratio was just above 8% at the end of 2006, the lowest level Chinese regulators consider safe.
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