Tag: Banking and Financial Institutions

China Central Bank Cuts Key Interest Rate on Bank Lending

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China’s central bank on Monday cut the main benchmark interest rate that the country’s commercial banks use in issuing one-year bank loans, the latest in a series of steps by the government to address falling apartment prices, weak consumer spending and broad debt troubles. But the reduction, the second time in two months that the government has pushed down commercial banks’ lending rates, was smaller than expected. The modest cut was the latest sign that the government’s usual tools for addressing an economic slowdown may have lost some of their…

China Faces a Crisis in Its Real Estate Sector

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A model Chinese property developer in a sector replete with risk takers is teetering on the edge of default. Short of cash, one of China’s biggest asset managers has missed payments to investors. And billions of dollars have flowed out of the country’s stock markets. In China, August has been a dizzying ride. What started three years ago as a crackdown on risky business behavior by home builders, and then an ensuing housing slowdown, has spiraled rapidly this month. The broader economy has been threatened, and the confidence of consumers,…

China and Hong Kong Stocks Slump as Economic Gloom Spreads

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About three weeks ago, at a meeting chaired by Xi Jinping, China’s leader, officials acknowledged that China’s economy was facing “new difficulties and challenges.” According to the official Xinhua News Agency’s summary of the Politburo meeting, officials promised to juice the economy, which had started to rebound at the start of the year after Covid restrictions were lifted but had been struggling. The economic troubles, they said, arose from flagging domestic demand and a “grim and complex” global economy, among other factors. Chinese stocks jumped at the time, even though…

Pan Gongsheng Named Head of Chinese Central Bank

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For nearly eight years Pan Gongsheng has overseen one of the world’s biggest pots of money: China’s $3 trillion in foreign currency reserves. Now he will run the country’s central bank, playing an even more powerful role in the Chinese economy. Mr. Pan, a prominent economist, was named on Tuesday as governor of the central bank, the People’s Bank of China. He had already been installed as the bank’s Communist Party secretary on July 1. It will be the first time in five years that one person will hold both…

China Hits Ant Group with $985 Million Fine

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Chinese authorities announced a fine of nearly $1 billion for financial technology firm Ant Group on Friday, nearly three years after regulators halted the company’s plan for a record-breaking public offering that ushered in a period of intense government scrutiny of technology firms. The fine announced by China’s top securities regulator is seen as a sign that the authorities are wrapping up investigations into technology firms, bringing to a close a period of tough regulation for the industry. Officials said earlier this year that they would start to relax oversight…

China’s Central Bank Cuts Loan Prime Rates

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China’s central bank cut key interest rates on Tuesday for loans issued by the state-controlled banking system, in the clearest sign yet of mounting concern in the Chinese government and corporate sector that the country’s economy is stalling. The interest rate cut was small — a tenth of a percentage point for the country’s benchmark one-year and five-year interest rates for loans. But because almost all of the country’s corporate lending and mortgages are linked to the two rates, the reductions could have some effect on the overall pace of…

China’s Biggest Banks Cut Deposit Rates to Spur Consumer Spending

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Why It Matters A reduction in the deposit rates is one lever that policymakers can use to stimulate spending. The hope is that the lower rates will give consumers an incentive to spend or invest money instead of parking their savings in the bank. The move is an indication that consumer spending, a key driver of economic growth, remains sluggish. After China scrapped its Covid restrictions late last year and reopened the economy, there were expectations that pent-up demand would push consumers to start spending freely — but that has…

World Bank Projects Weak Global Growth Amid Rising Interest Rates

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The World Bank said on Tuesday that the global economy remained in a “precarious state” and warned of sluggish growth this year and next as rising interest rates slow consumer spending and business investment, and threaten the stability of the financial system. The bank’s tepid forecasts in its latest Global Economic Prospects report highlight the predicament that global policymakers face as they try to corral stubborn inflation by raising interest rates while grappling with the aftermath of the pandemic and continuing supply chain disruptions stemming from the war in Ukraine.…

HSBC Shareholders Defeat Ping An-Backed Measures

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Shareholders in HSBC, the European financial giant, voted on Friday to reject an investor proposal meant to pressure the bank into breaking off its lucrative Asian operations. That initiative — backed by HSBC’s largest investor, the sprawling Chinese insurer Ping An — received only about 20 percent of the votes, the company said. A companion proposal backed Ping An, to restore the bank’s dividend to prepandemic levels, was also defeated. The vote was a show of support for HSBC’s management, which had urged shareholders to vote no. It was announced…

Born in Asia but Based in Britain, HSBC Fights to Stay in One Piece

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For many investors, HSBC, Europe’s largest lender with a venerable place in Britain’s banking industry, offers little to critique: It is performing well and has focused on its most profitable and fastest-growing operations, those in Asia. But for the firm’s largest investor, the sprawling Chinese insurance giant Ping An, that isn’t enough. Over the past year, Ping An has waged a campaign to convince HSBC to spin off its Hong Kong-based operations in some way, cracking open the bank’s global empire to improve its financial performance. It’s a move that…