Date
18 August 2017

Legislator calls for end to bank lending quotas, magazine says

A former senior mainland finance official has called for bank lending quotas and loan-to-deposit ratio restrictions to be scrapped, the Journal of Financial Research reported Wednesday. Wu Xiaoling, the deputy director of the National People’s Congress’s Financial and Economic Affairs Committee and former deputy central bank governor, said the rampant practice of banks “buying deposits” to meet loan-to-deposit requirements encourages opportunism and opens the door to corruption and arbitrage activities. The rush to amass deposits at key times, such as the end of a quarter or year, also distorts M2 money supply, adding to the central bank’s monetary control problems, the report said.

– Contact HKEJ at [email protected]

KZ/AC/SK

 

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