China’s Credit Growth Slowdown Underscores Worries Over Economy

The transcript discusses the People's Bank of China's (PBOC) shift towards pro-growth policies amidst economic slowdown concerns. Despite policy easing, the measures are limited compared to previous episodes, with continued housing and regulatory tightening. Fiscal policy shows mixed results, with increased local bond issuance but declining land sales affecting local governments. Shadow banking faces challenges as loans move onto balance sheets, and aggregate financing growth is expected to stabilize. Banks are hesitant to lend due to economic slowdown fears and regulatory constraints, including capital adequacy requirements.

What are the reasons for banks' hesitation to lend despite liquidity being available?

In what ways are regulatory requirements affecting banks' lending capabilities?