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Risk China: PBoC needs to 'adhere to stability' in managing liquidity risk

China central bank "blind" to potential capital market reaction in its attempts to clamp down on the shadow banking sector

China map

The People's Bank of China (PBoC) needs to place a greater focus on market stability with regard to the current liquidity problems facing the country's banking system, according to a senior figure from Bank of Communications.

After decades of high growth, the Chinese economy is showing signs of slowing down with the first real stresses occurring last week as credit froze in the interbank market with the seven-day repo rate at one point spiking to 28%.

Market commentators have speculated that the

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