Chinese banks to stop lending to US banks

Ender · Post by **Ender** » 2008-09-26 01:43am

BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

"The decree appears to be Beijing's first attempt to erect defences against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.

A spokesman for the CBRC had no immediate comment. (Reporting by Alan Wheatley and Langi Chiang; editing by Ken Wills)

Vaporous · Post by **Vaporous** » 2008-09-26 01:54am

Uh oh.

How long do we stay afloat without free and easy Chinese credit?

Tribun · Post by **Tribun** » 2008-09-26 05:06am

If even THEY stop loaning (not easy to be accomplished), then we know that something is REALLY wrong.

Post by **Edi** » 2008-09-26 05:36am

This was already posted here. That thread seems to have gathered most of the economic news stuff related to the financial system crisis.

Admiral Valdemar · Post by **Admiral Valdemar** » 2008-09-26 07:35am

I had posted about this in another thread, but then read that it had been denied by the government. Now that it seems to be true, this bodes ill for the States. No matter what plan gets accepted in the end, it's all for naught if the world loses all confidence and ditches the dollar. He who panics first, panics best.

Fingolfin_Noldor · Post by **Fingolfin_Noldor** » 2008-09-26 09:52am

No sane bank can possibly loan money to an entity who cannot repay the loan. Sadly that cardinal rule was broken in the United States.

The Chinese Government has a history of saying something up front, but saying something else behind. I won't be surprised if this bit of news is true.

Jadeite · Post by **Jadeite** » 2008-09-26 01:38pm

Link

CBRC denies report on lending ban to U.S. banks
Last Updated(Beijing Time):2008-09-26 08:34
The China Banking Regulatory Commission (CBRC) on Thursday denied a media report in Hong Kong that it has told domestic banks to halt interbank lending to U.S. banks.

"The regulator has never, through any channel, issued a statement or told domestic commercial banks not to lend to U.S. financial institutions," the CBRC said in a statement.

The South China Morning Post reported on Thursday that the regulator ordered local banks to halt interbank lending to U.S. banks to avoid possible losses during the financial crisis.

The newspaper cited unidentified sources as saying that the ban applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

The South China Morning Post had carried an irresponsible report without seeking verification, said the statement. It added that the regulator condemned this and reserved the right to ascertain legal responsibility.