PBOC encourages bank lending to counter economic slowdown

Bloomberg

The People’s Bank of China (PBOC) reiterated it will encourage banks to expand lending to meet demand and bolster a slowing economy.
The central bank will “keep liquidity reasonably ample, guide financial institutions to effectively expand loan extension, and make the overall credit growth more stable,” it said in the quarterly monetary policy published Friday.
The PBOC will avoid flooding the economy with stimulus while satisfying the real economy’s reasonable financing need, the report said. It will make monetary policy actions “ample, targeted and front-loaded,” and enhance the structure of credit, according to the report.
The comments reflect an easier credit policy previously signaled by PBOC officials, as Beijing vowed to address the effects of a property market downturn and sporadic virus outbreaks. Credit expansion accelerated more than expected in January as a result.
The PBOC will step up support for small businesses, innovative sectors, green projects and other areas, according to the report.
The central bank reiterated the goal of matching the expansion of money supply and credit with nominal economic growth, as well as to keep the ratio of debt to gross domestic product basically steady.
Meanwhile, a senior Chinese central bank official blasted the nation’s brokers for providing “illegal” cross-border securities trading services to mainland investors, just three months after he questioned the legitimacy of some online trading apps.
Offshore units of some brokers are working with overseas branches of Chinese banks to help individual mainland investors wire their money across the border, often under false claims that the foreign exchange is used for personal travel, Sun Tianqi, head of the financial stability bureau at PBOC, wrote in an article published in the central bank’s bi-weekly China
Finance magazine.