China banks cut back lending to foreign banks – Update

September 25, 2008 by · Leave a Comment
Filed under: Industry News 

Okay after doing some more research it looks like this is true but “unofficial”. Along with the German Finance Minister’s comments this is the world telling the U.S. that if they continue down this path it will have repercussions. It might be time to batten down the hatches? I have been calling congressmen and women all morning to tell them this bill is a bad idea and it opens you up to being unelected.

Press Release:

Some Chinese banks have cut lending to foreign banks in China’s interbank money market because of the global financial crisis, but trade continues and foreign banks remain able to operate, traders said on Thursday.

Dealers at over half a dozen Chinese and foreign institutions, who declined to be named because of the sensitivity of the issue, said U.S. and some other foreign banks were finding it harder to borrow from the market.

A number of Chinese banks have temporarily stopped offering new lending to U.S. banks in yuan and other currencies, because of uncertainty about risk, three traders said. Similar caution in lending has been seen in markets around the world.

“We have had difficulty borrowing money from Chinese banks since the start of this week,” said a dealer at the branch of a U.S. bank in Shanghai.

However, he and others said U.S. institutions had not been completely cut off from access to funds.

“We continue to conduct business as usual,” Citibank China, a unit of U.S. giant Citigroup said in a statement. It said the ratio of its loans to deposits in China remained “well under” the country’s regulatory requirement of 75 percent.

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