Chinese banks on the brink of crisis

Chinese banks on the brink of crisis

China is it in terms of a major financial crisis? The tensions in recent days between Chinese banks, such as the strong reaction of the People's Bank of China ( PBOC ), the central bank, leaving some observers fear .

Thursday, December 19 , it announced that it had conducted injections of short-term liquidity in the markets , without specifying the amount .

Objective: off soaring interbank rates , those at which banks lend money , revealing that they are no longer trusted . The risk that the most vulnerable can no longer finance itself. This is called a liquidity crisis (cash crunch in English ) .




Measures PBOC are reminiscent , to a lesser extent , those taken by the U.S. Federal Reserve and the European Central Bank after the collapse of Lehman Brothers in 2008 , to avoid paralysis of the financial system . But the intervention of the PBOC was not enough to completely reassure Chinese investors : Friday, December 20 morning , the repo rate to seven days - an indicator representative of the liquidity situation in the market - was 8.1277 % . This is its highest level in six months.

DIFFICULT FINANCIAL SYSTEM REFORM

In an attempt to calm the situation , the central bank is committed to unveil Friday afternoon, it has invested more than 300 billion yuan ( 36 billion euros) over three days, to more .. .