The Financial Stability Bureau chief of the People’s Bank of China has said that it will not flood the economy with credit, and will simultaneously continue making efforts to ensure reasonably adequate liquidity to support growth, reports Caixin.
“(We) will fully take into account new changes in the economic and financial situation to fine-tune (policies), but we will do this in a measured manner and firmly avoid flooding the economy (with credit),” Wang Jingwu, head of the Financial Stability Bureau of the People’s Bank of China , said in an interview with the Financial News, a newspaper run by the monetary authority. The bureau is responsible for guarding against systemic risks in the financial system.
“(We) will keep a close eye on and carry out a dynamic assessment of market liquidity and factors affecting it, and be vigilant against the formation of a ‘liquidity delusion’ and expectations of one-way (moves in the monetary policy) among market participants,” he said.
Wang’s remarks highlight the government’s concern that record lending in January is fueling expectations of a renewed lending binge as policymakers struggle to balance boosting economic growth and curbing financial risks.