Chinese banks issue £134bn loans to lift stock market
Some of China's biggest state-owned banks have contributed to a £134 billion fund being used to boost the country's ailing stock market.
State-owned banks in China have lent over a trillion yuan to a government-owned finance agency to help stem falls on the country's stock market.
China Securities Finance Corp (CSFC) has received 1.3 trillion yuan (£134 billion) over the past few weeks, funds that have been passed on to brokerage firms to help finance share investment.
It was already known that the Chinese government had been helping the Shanghai Composite Index to rebound from the low it hit on July 10th, but these latest figures, which come from Chinese financial magazine Caijing, suggest the extent of its involvement has been bigger than previously thought.
Separately, Bloomberg reported today (July 17th) that the CSFC has between 2.5 trillion and 3 trillion yuan stockpiled to use to help the stock market if needed.
A total of 17 banks have provided loans, with the biggest - 186 billion yuan - coming from China Merchants Bank, the sixth largest lender in the country in terms of assets. More than Rmb100 billion was provided by China's five biggest banks - Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China and Bank of Communications.
At the peak of the share sell-offs Chinese stock market had lost around $4 trillion (£255 trillion) in value, according to Reuters. The tumble was triggered by rumours that China's central bank was set to end monetary policy easing and the government implemented a number of other measures in a bid to help the market recover, such as ending initial public offerings and preventing companies - and their high-ranking employees - from selling shares.