Central Bank Swerves to Block Deposit Detours

The People's Bank of China is tightening deposit reserve requirements in a way that forces bankers to abandon strategies that circumvent monetary policy and promote easy credit.

In an August 25 order, the central bank announced a mandatory expansion of existing bank deposit reserve requirements.

The order included no official explanation, but sources said the central bank's main goal is to restrict certain off-balance sheet techniques used by bankers to maintain or expand lending to business customers, including those having trouble repaying old loans.