Where’s the next Black Swan event coming from? My guess China or Iran/MidEast. The banking sector in China has been discussed as train wreck waiting to happen.
By SHEN HONG And DINNY MCMAHON CONNECT
Dec. 23, 2013 7:50 a.m. ET
A cash crunch in China pushed short-term interest rates to a new recent high Monday and highlighted the difficulties faced by the central bank in managing an increasingly complex and stressed financial system.
Rates rose again despite cash injections last week by the People’s Bank of China, 601988.SH +1.53% which has tried to rein in lending but is facing crosscurrents ranging from government budget tightening to quirks in bank accounting rules to distrust among banks to rising losses on loans that haven’t yet been disclosed.
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A broad squeeze in lending will likely continue into next year, analysts said, as the central bank tries to get control of short-term interbank lending while the government limits spending. China will also feel the impact of the end of monetary stimulus in the U.S.