HONG KONG — China’s financial system is in the throes of a cash squeeze, with interbank lending rates spiking on Thursday and bank-to-bank borrowing nearly stalled, as the government tries to restructure the economy and punish speculators.
With China’s interbank and money market rates soaring over the last two weeks, banks and other financial institutions are afraid of lending to one another. Those in need of short-term cash, or liquidity, must pay dearly; failure to do so raises the possibility of defaults.
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Neil Gough and David Barboza, The New York TImes via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/Zb2-U2AgYgY/
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