China to inject billions into banks

Source :

www.ftalphaville.com


China is preparing a second round of billion-dollar cash injections from its bulging foreign exchange reserves into state banks, according to state-owned media. China Development Bank, the first of China’s policy banks to be made to operate on a commercial basis, would receive a $20bn capital injection as part of its restructuring, the China Daily reported. CDB, along with Temasek, the Singapore government’s investment arm, last month agreed to buy into Barclays bank in the midst of the UK group’s takeover bid for ABN Amro. The second institution in line for a capital injection, reportedly of $40bn, is the Agricultural Bank of China, one of the country’s “big five” state lenders and the last to be restructured in readiness for an overseas listing.

 

interesting. what will that do to the money supply?

 

yeah i wonder why they would do that.

 

to increase reserves.

 

but the bank now dont have to use revenue to that themselves, which means they can use that money to lend or buy stocks. I wonder why they just didnt mandate that