China banks

China loosens its leash on banks

China removes the floor for lending rates, but the move is unlikely to lower funding costs for companies in the short term.

China took another cautious step towards freeing its banks from regulation on Friday by abandoning its floor on lending rates.

The People’s Bank of China said in a statement that it would scrap the floor on lending interest rates. Chinese banks are not allowed to set lending rates below 70% of a guidance rate set by the central bank.

The PBoC said the move is designed to lower borrowing costs for individuals and smaller companies. However, some analysts said the reform would not lead to a significant or immediate change of banks’ lending practices and lending rates, because most lending rates are already higher than the interest...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222