by ilene - February 21st, 2010 2:44 pm
Courtesy of Vincent Fernando at Clusterstock/Business Insider
The China Banking Regulatory Commission (CBRC) issued a new post on their website Saturday explaining new regulations aimed at tightening both personal and working capital business loans.
China Daily:
Banks must set a lending quota after "prudent calculation" of borrowers’ "actual demand" and must not lend excessively,
…
Banks are also required to improve risk control after granting loans and to be aware of factors that might influence the repaying capabilities of borrowers through inspections and monitoring, the statement said.
For personal lending, the CBRC asked banks to be more sophisticated in the management of the lending process, especially on the use of the loans, according to the regulation.
Borrowers will not be able to obtain loans without declaration of a specific use, and they should meet bank representatives in person to avoid false claims, according to the CBRC.
These new regulations actually went in effect on February 12th, despite the Saturday web site release. It seems the regulator is trying to explain themselves further, or was just slow.
Tags: Banks, Business Loans, CHINA, China Banking Regulatory Commission, Economy, Markets
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by Chart School - October 26th, 2009 11:25 pm
Courtesy of Jake at Econompic Data
We have detailed the deflationary pressures from low capacity utilization and high unemployment before, but John Mauldin details the deflationary pressure coming out of an area that was / is supposed to power the U.S. recovery… businesses. We have detailed the pullback in new loans to consumers, but below shows the reduction in business loans. First to John Mauldin:
Then we have Reduced Borrowing and Lending, as consumers are paying down debt and banks are reducing their lending. Both are necessary in a credit crisis-caused recession. Bank lending is basically back to where it was two years ago, and shows no sign off rebounding. Banks, as I have written, are buying US government debt in an effort to shore up their balance sheets. Lending to small business, the real engine of job creation, is sadly decreasing eachmonth.
The chart below shows the year over year change in business loans as a percent of GDP going back 60 years.

A record drop and this one doesn’t yet appear to be slowing down.
Source: BEA / St. Louis Fed
Tags: Business Loans, deflationary pressures
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