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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Free AccessMNI INTERVIEW: PBOC To Create Market Rate Benchmarks: Official
BEIJING (MNI) - The People's Bank of China is developing benchmarks for
market-based interest rates and working to influence the yield curves of
government bonds as it retools its interest rate formulation mechanism, a PBOC
official told MNI in an interview.
The central bank also wants to improve lenders' ability to price loans and
introduce "moderate competition" to further cut financing costs faced by small
and micro businesses, said Wang Yuling, head of the PBOC's Wuhan branch.
Wang commented after Governor Yi Gang said on March 10 that the PBOC was
able to guide risk-free interest rates lower last year, including the 7-day repo
rate and the yield on 10-year government bonds, and that policymakers would
lower risk premiums for lending to small and micro businesses.
"We should strengthen the guidance role played by the central bank's policy
rate system and improve the interest rate corridor," Wang said, while attending
the National People's Congress.
Asked how best to lower risk premiums in practice, Wang said the central
bank would help lessen the impact from "institutional and monopoly risk
factors."
The PBOC will actively promote the use of certificates of deposit as an
alternative to some wealth management products and structural deposits, said
Wang, adding that innovations will be regulated.
Another way to help reduce risk premiums on small and micro business loans
is by providing government-supported institutional guarantors and national
financing guarantee funds, she said.
Regulators will further encourage banks to recapitalise via multiple
channels, Wang said, adding that banks' average capital adequacy ratio was an
already solid 13.81% as of September 2018,. "We should provide a good market and
policy environment for the recapitalization," she said.
The central bank will also encourage banks to engage long-term investors,
including foreign banks, and support lenders selling preferred shares and
convertible notes, Wang said.
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com
[TOPICS: MMQPB$,M$A$$$,M$Q$$$,MT$$$$,MX$$$$,MGQ$$$]
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.