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China’s regulators are stopping banks from inflating deposit rates to ensure funds support the real economy. But some banks, driven by their need to attract deposits, are still likely to find ways to get around tightened regulations. https://t.co/6ZrlP5IihL
"A tug of war has been going on in #China b/t banks—who are trying to raise interest rates to attract deposits—& regulators—who want them to cut rates to discourage saving & spur spending & investment...Right now, regulators have the upper hand." https://t.co/G9DAN2XLm5
1/2 Interesting Caixin article on pressure on banks to lend "productively": "A tug of war has been going on in China between banks — who are trying to raise interest rates to attract deposits — and regulators — who want them to... https://t.co/YWS5D94FC9
China's commercial banks, particularly smaller lenders, have been raising interest rates to attract deposits, defying regulators' efforts to lower them. This has led to a tug of war between banks and regulators, with the latter currently having the upper hand. Regulators are aiming to cut rates to discourage saving and spur spending and investment, ensuring that funds support the real economy. Despite the crackdown, some banks may still find ways to circumvent the tightened regulations. The situation has raised concerns about a potential Chinese Banking Crisis.
