Mar
16
Mounting Costs, Not PBOC, Could Slow China’s Bank Debt Binge
By-
Issuance of NCDs by small lenders more than doubled in 2016
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The short-term debt is more expensive than commercial paper
China may avoid having to pull out the big stick when it comes to reining in a record short-term borrowing spree by its smaller banks.
The increased cost to lenders of issuing so-called negotiable certificates of deposit will naturally deflate a market that jumped by 90 percent in February from a year earlier, according to Ping An Securities Co. Demand is also waning for the securities, used by Chinese banks as a way of leveraging up investments and expanding their balance sheets, with mutual funds cutting their holdings to the lowest level in at least a year in January…
Mounting Costs, Not PBOC, Could Slow China’s Bank Debt Binge
