Zhou Xiaochuan Interview

Hellenic Shipping News: PBOC Chief Sees Policy Banks Relying on Bonds for Capital Needs
China’s policy banks will likely rely on domestic and overseas bond issues for their capital needs in the near term, central bank chief Zhou Xiaochuan was quoted as saying in a newspaper report Thursday.

In an interview with the China Business News, the governor of the People’s Bank of China said the banks currently could borrow more cheaply offshore but that might be a temporary situation, apparently referring to the widespread expectations that U.S. interest rates will soon rise.

...He also said the policy banks, while focusing on assisting government policy, needed to avoid the pitfalls of the past, including lending without sufficient constraints.

This could be done through their own internal management as well as taking into consideration global standards on capital requirements to ensure stable development.

Mr. Zhou also suggested that the policy banks might at some point take deposits.

“My personal view is there may not be a need for strict limits on their ability to take deposits,” he said.
Full Chinese interview here: 周小川谈政策性银行改革:资本约束是核心. Covers a lot more topics. Google Translate link: Zhou Xiaochuan On the policy banks: the core capital constraints

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