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SHANGHAI - CHINA's central bank is preparing a new system to help locally incorporated foreign banks access short-term funding amid global financial crisis, bankers said on Thursday.
The system will allow the foreign banks to use collateral such as equity and government bonds for loans with maturities of either 20 days or three months, bankers who declined to be named told AFP.
State media reported earlier Chinese banks are reluctant to strike deals with foreign lenders on the interbank market as they worry the global crisis has reduced their ability to pay back the money.
'The central bank wants to help financial institutions tackle the impact of the global financial crisis. It's a tool aimed to ease liquidity pressure on the market,' a banker who has attended a briefing by the central bank told AFP.
A central bank spokesman declined to comment.
A similar system was first adopted by the US Federal Reserve in December last year to ensure short-term fund-raising of financial institutions suffering in the credit crunch.
The plan is likely to be launched as early as mid-Nov, but has yet to be finalised, bankers said.
Beijing is adjusting its monetary policy along with other measures to minimise the impact of the worldwide slowdown and ensure sufficient liquidity to support domestic economic growth.
China's economic growth slowed to nine per cent in the third quarter, the slowest quarterly growth in more than five years.
The central bank cut key interest rates on Oct 29 to spur economic growth, the third such move in six weeks.
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