This hit the wires on Christmas Day in Asia, so it not cutting-edge news, just noting it (from Bloomberg): China Said to Plan Waiving Reserve Requirement for Some Deposits

The article cites “people with knowledge of the matter”, who asked not to be identified as they weren’t authorized to discuss the plan publicly:

In brief:

  • China plans to temporarily waive a requirement for banks to set aside reserves for some deposits
  • An effort to boost lending
  • Commercial lenders won’t be required to set aside reserves for the savings that they hold for non-deposit-taking financial institutions
  • The waiver is part of planned changes to how banks’ loan-to-deposit ratios are calculated
  • The waiver is seen as another move to replace a universal reserve-requirement ratio cut that the People’s Bank of China needs to boost credit and bolster the economy
  • Concerned that a broad reduction might send out a strong easing signal and bring turmoil to stock market, the PBOC has added liquidity by stealth at least four times in the past four months

More at the link

(Also at the Wall Street Journal, but gated: China to Ease Rules to Boost Lending
China’s Central Bank to Relax Calculation of Banks’ Loan-to-Deposit Ratio

In brief:

  • People’s Bank of China told representatives from two dozen banks and other financial firms that the central bank will soon relax a major restraint on banks’ abilities to make loans, according to the banking officials
  • The move would essentially allow them to include more money in their deposit base, giving them more room to lend
  • PBOC refrained from making a broader easing move for fear that such steps would send the market too strong a signal about easing monetary policy
  • “It’s a big help for the banks and at the same time, the central bank can maintain its neutral monetary stance,” said one of the banking officials
  • Analysts estimate the move is roughly equivalent to injecting 1.5 trillion yuan—or about $242 billion—into the banking system