No Banking Crisis In China Despite Cash Crunch

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According to experts, China's financial system is on a healthier trend. The recent cash crunch experienced by the country did not signal any systematic risk.

Beijing pledged adequate funding, making borrowing cost in the mainland spike to record heights making stocks deflate. This raised fears of a coming banking crisis that could compare to what was experienced in the US in 2008.

Chief investment officer at Hong Kong-based Harvest Global Investment, Andrew Tan said, "In a few months time, people are going to look back on this and realise it's all noise."

Tan mentioned that the tight cash management is the effect of the PBOC's (People's Bank of China) seeking to limit the funds to an informal loan market.

Tan commented, "We are saying loud and clear that we don't think there's a systemic risk in the Chinese financial system. The overall structure is much more robust than what most foreigners think."

Tags
China, People's Bank of China

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