The bank is trying to rein in an explosion of off-balance sheet and risky lending as cautious government regulators resist speedier financial reform that would force markets to price risk more realistically.
China Central Bank Urges Proper Management Of Risk
"We will guide commercial banks to strengthen liquidity and asset liability management," the PBOC said, to make sure financial institutions are supporting the real economy rather than speculative activity.
Beyond the publicly acknowledged debt, however, is the question of how much more is hidden in China's shadow banking sector, with its informal loans and so-called wealth management products that often promise high returns.
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