China promises banks support to calm markets
BEIJING (AP) — China’s central bank has promised to help banks that run into cash shortfalls in an effort to calm fears the country faces a credit crisis.
The central bank said Tuesday it would provide “liquidity support” if needed after a shortage of money in credit markets caused interest that banks pay to borrow from each other to spike last week.
The bank said it already had provided money to some institutions but gave no details.
The spike in interbank lending rates caused Chinese share prices to plunge Monday on fears the country faced a credit crisis that might disrupt the economy.