Chinese Banks Lent $209.4 to Halt Stock Market Meltdown

China’s biggest banks have lent 1.3 trillion yuan ($209.4 billion) to the country’s state-backed margin lender to halt a meltdown in Chinese shares, local media said on Friday, underlining the government’s determination to support stock prices.

Financial magazine Caijing cited unnamed sources as saying that 17 commercial Chinese banks had coughed up the cash for China Securities Finance Corp as of Monday, after China’s central bank said it wanted to extend funding to the firm.

China Merchants Bank Co was the biggest financier, lending 186 billion yuan to China Securities Finance, Caijing said.

China Securities Finance is the only institution that provides margin financing loan services to Chinese securities firms, and is seen as an important conduit for the government to counter stock market volatility.

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza