Chinese banks must actively increase funding for the real economy and not wait for the government’s direction to boost lending, said the head of the People’s Bank of China’s monetary policy.
In a commentary in the central bank’s China Finance Magazine, Sun Guofeng wrote that problems with capital replenishment, bank liquidity gaps and poor rate “transmission” were three major constraints on banks’ credit supply, according to Reuters.
Banks also face “changes in the foreign exchange situation” which place mid- and long-term limits on banks’ liquidity, Sun said, adding that the bank is working to ease these limits on credit availability.
“If capital is not replenished in a timely manner it can restrict reasonable credit availability for the next stage” of lending, Sun wrote.