Routine month-end demand for cash in China's banking system snowballed into a scramble on Oct. 31 that pushed short-term funding rates as high as 50% in some cases, an incident that authorities are
"It was an accident," said Xia Chun, chief economist at wealth manager Yintech Investment Holdings, calling it an unforeseen consequence of the government's heavy hand in financial markets. Funds and non-banks borrow and roll over loans that finance their investments and trades in the repo market. The month-end is also when banks and other finance-sector participants have to square their books and comply with rules on capital buffers.
The absence left a couple of desperate borrowers paying 30%-50% - rates not seen since defaults at China Everbright Bank"No one left the trading desk, as you don't know how things will go ... the whole trading room was in combat mood," said one fund manager in Beijing.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: Investingcom - 🏆 450. / 53 Read more »