Bank Of China Ltd. has ordered its credit officials to halt any new yuan loans due to overly fast lending growth so far in January, a person familiar with the situation said Wednesday. The headquarters of the state-controlled lender has issued a notice to all of its branches to stop issuing new yuan loans and also curb foreign-currency denominated new loans, said the person, adding that the bank didn't say in the notice when new yuan loans will resume.
Any new loans, if they were to be extended, would have to be approved by the bank's headquarters, the person said.
In a statement, Bank of China said its new loans in the first 20 days of January has been high and that it will take a closer look at its lending, though it didn't say whether it had suspended lending.
And from another WSJ story:
This concern about bank lending comes at a time when global markets are already worried that an increase in Chinese bond yields and last week's rise in banks' minimum reserve requirement herald the start of a tightening in interest rates.
The US is not the driver of this recovery -- Asia is. So any tightening of credit by an Asian official/institution is going to have negative implications for all financial markets.
