China’s central bank pledged more financial support for small and micro businesses in the midst of the slowest growth in three decades.
The People’s Bank of China (PBoC) said that it would improve the mechanism to spur greater lending to such firms, according to a «Bloomberg» report citing a statement made after a two-day conference in Beijing. Policy tools at the PBoC’s disposal include reserve cuts, re-lending and re-discounting.
In addition, the PBoC also said it would continue efforts to mitigate risks with a focus on long-term regulatory mechanisms targeting internet finance and real estate financing.
Collective Calming
Other key regulatory bodies also announced their own efforts to maintain market stability including the State Administration of Foreign Exchange, China's forex regulator, which said it would improve the mix of tools used to counter the impact from external shocks to the country's trade and investment, international balance of payment and cross-border capital flows.
The China Banking and Insurance Regulatory Commission (CBIRC) said in a statement on Friday that it would introduce various measures to cut bad loans and promote mergers, capital injections and restructuring of high risk institutions, many of which are troubled small banks and insurers. Measures include establishing resolution funds and bridge banks coupled with inclusion of new investors and market-oriented exits.
The CBIRC also said it would direct the nation’s vast pool of household savings – estimated to be around 70 trillion yuan ($10 trillion) – into funds that invest in equities but did not detail the methods.
