Photographer: Nelson Ching/BloombergChina’s Credit Engine Hasn’t Been So Powerful in a Decade

Photographer: Nelson Ching/BloombergChina’s Credit Engine Hasn’t Been So Powerful in a Decade

China’s central bank draws a big contrast from most of its developed world counterparts, with increasing power to generate new lending through expanding the supply of money.The latest evidence, from March credit data, shows that for all the People’s Bank of China’s challenges in adopting a new monetary policy structure, it’s proving effective in the basic mission of spurring new lending to support growth. The so-called money multiplier, a gauge of the extra credit that’s created by additional base money from the central bank, has climbed to the highest since 2006, data compiled by Bloomberg show.
Japan saw this ratio tumble in the 1990s, when banks became l 
 ess interested in making new loans as they agonized over a surge in bad debt following asset-bubble implosions.

Bloomberg

April 19, 2016 / اقتصاد / Tags: ,

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