The Chinese central bank made its first direct comment about last week's cash crunch on June 24th, ordering country’s commercial banks to improve their credit risk and liquidity management procedures and to do more to help restore credit in the market.
Extracts from the letter of General Office of the People's Bank of China on commercial banks' liquidity management
“At present, the overall liquidity of the banking system is at a reasonable level, but due to changes in the financial market factors, the objective of commercial banks liquidity management has put forward higher requirements.”
“Financial institutions must continue to implement prudent monetary policy, improve risk awareness, continue to strengthen liquidity management and promote stable monetary environment.”
“Commercials banks must pay close attention to the liquidity situation in the market and should strengthen their analysis and forecasts of factors affecting liquidity.”
“Financial institutions, especially large commercial banks, must not only strengthen themselves, but also play an active role in using their advantages to support the central bank in stabilizing the market.”
6/24/2013 1:00:20 PM