(Reuters) – China’s top banks are expected to win approval for the issuance of tens of billions of yuan in negotiable certificates of deposit (NCD) as early as next month, in another step towards developing market-determined interest rates.
NCDs would enable banks to access large amounts of funds at relatively stable costs, providing some alternative to borrowing from the inter-bank market, where the cost of funds can be volatile, as seen in June when a liquidity squeeze briefly sent short-term money market rates to nearly 30 percent.
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Shengnan Zhang and Hongmei Zhao, Reuters via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/b1FsEgk0edE/
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