The credit-to-deposit ratio in China's Banking System witnessed a sharp rise by 27 ppts since 2011 to stay at the elevated level of 116% as of February, which is much higher than the theoretical level, according to Deutsche Bank analysts. Hans Fan and colleagues said in their March 23 research piece titled “Chinese banks – Financial deleveraging” that they believe China is only in its early stage of financial deleveraging and there are growing risks of an "Asset bubble " crash.
China's Banking System - Stretched domestic liquidity
The DB analysts point out that China’s monetary policy has been shifting gradually towards a tightening stance since 2H16. The analysts highlight that the PBOC chose to target the liabilities side of the...
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