|China on Brink of Bank Run|
|by Tom McGregor||Sun, Dec 22, 2013, 07:59 PM|
BEIJING: China's economic bubble appears headed for an inevitable fall. Chinese banks are facing a severe liquidity crisis, which could cause a nationwide bank run.
According to the BBC News, "China's interbank lending rate has hit its highest level since June, despite regulators' attempts to calm concerns over a potential cash crunch. The seven-day repurchase rate rose to as much as 9% on Friday, even though China's central bank made an emergency capital injection the day before."
The People's Bank of China (PBOC) has noted remarkable negative market sentiments and fears a crash is soon headed its way.
As reported by the BBC News, "The rate is a key gauge of how much is available in short-term funds for the country's banks to lend to one another. The turmoil caused China's benchmark stock index to fall by more than 2%."
The PBOC had to inject $20 billion into Chinese banks on Friday to prevent a banking collapse.
To read the entire article from the BBC News, link here:
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