Chinese Cash Control Adds Pressure On Small Banks

 
Chinese Cash Control Adds Pressure On Small Banks
 
Current control plans on Chinese cash crisis which considered the worst in a decade may add pressure on small banks to leave negative impact on its financial strength, as current reliance on interbank finding may decline their erosion of loan margins.
 
Moreover, the mid-sized banks hits 23% of their capital and funding from the interbank market operations by the end of last year, in comparison with the 9% for the largest governmental banks.
 
Its worth to mention that liquidity in the world’s second largest economy inclined to its highest levels since 2003, amid the recent illegal capital inflows which curbed the nation’s growth.
 
Meanwhile, Shares of Minsheng Bank fall by 10%, or the daily limit, to 8.51 yuan in Shanghai trading. The stock fell 8% in Hong Kong which is considered the most since November 2011, extending its loss this month to 24%. Merchants Bank declined by 4.6% today in Hong Kong, after losing 20% this month. Industrial Bank Co. fell 10% to the lowest since December, after falling by 26% in June.
 
From another side, the POBC noted earlier that Chinese monetary policies should be fine-tuned in order to face any further challenges and cut the nation’s previous slowdown series, where Chinese economy showed slowed performance recently.