China Banks Told to Halt Lending to U.S. Banks
September 25th, 2008Update: China Denies Report It’s Banned Lending to U.S. Banks
Some weird financial ripples from China in the last couple of days…
Via: 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.
Research Credit: EB
The U.S. runs a $250 Billion annual trade deficit with China. Every cent of which must be financed through the sale of U.S. assets. If China stops buying the assorted notes, bonds and other “financial instruments” from the U.S., then won’t that mean the doodads that end up on the shelves at Wal-Mart will stop arriving on those Chinese container ships? Then again, we’ve been warned for years that the Chinese “vendor financing” is coming to an end; but the Wal-Mart shelves are still overflowing with that cheap crap.