Singapore Stock Market News

China Insights: recalculating bank's LDR

StockFanatic
Publish date: Wed, 11 Jun 2014, 09:30 AM
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Highlights:
The Deputy Chairman of China's banking regulator Wang Zhaoxin said on 6 June that the regulator is considering adjusting the calculation of loan-to-deposit ratio (LDR)

■ The LDR cap has played an important role in managing China's overall liquidity for the past two decades, however, the efficiency has been put into question with the further development of China's financial market and diversified funding channels.

■ China is unlikely to scrap the LDR cap anytime soon. The likely scenario is that China may exclude the loans to SMEs or farming from the calculation of LDR.

■ The possible adjustment in general is positive for liquidity and risk appetite in our view.
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