China frees banks to set their own lending
rates
In general, banks usually make profits by
charging interest on the money they are lending to people or companies.
Therefore, the higher the gap between the lending and paying (to depositors or
other financial institutions) interest rates are, the higher the bank’s revenue
might be.
Banks in China have been restricted to set their lending interest rate at no lower than a set rate by its central bank. In other words, their selling prices have been restricted. Now, as part of China’s move to make its financial market more market driven, banks are now allowed to set their lending rates freely. This means they could offer lower lending rate to compete in the financial market, which could be good news to borrowers.
Banks in China have been restricted to set their lending interest rate at no lower than a set rate by its central bank. In other words, their selling prices have been restricted. Now, as part of China’s move to make its financial market more market driven, banks are now allowed to set their lending rates freely. This means they could offer lower lending rate to compete in the financial market, which could be good news to borrowers.
Enjoy reading and learning about a recent
move in China’s financial market.
No comments:
Post a Comment