China Plans a New Round of Easing

by Marilou Moursund on April 28, 2015

in Debt,Foreign Markets,Recommended Reading


It appears that China is going to follow the European Central Bank in addressing its long term debt problems by helping lenders restructure debt in order to increase lending and boost their economy.  From the linked WSJ article:

China’s central bank is planning to launch its own version of innovative credit-easing programs adopted by its counterparts in developed countries, according to officials with knowledge of the matter, as Beijing’s flagship plan to restructure trillions of dollars of local-government debts is hitting snags.

Under the plan, which could be put in place in the next couple of months, the People’s Bank of China will allow Chinese banks to swap local-government bailout bonds for loans as a way to bolster liquidity and boost lending, the officials said. The strategy—dubbed Pledged Supplementary Lending—is similar to the long-term refinancing operations, or LTROs, used by the European Central Bank.


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