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2012-06-11 — marketwatch.com
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If there is a policy failure, arguably it stems from authorities' inability to get banks to ramp up lending, despite three required-reserve-ratio (RRR) cuts in the past six months. This move acts to free up more banks funds for lending.
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According to Capital Economics, at most points in the past, the value of Chinese rate cuts was entirely in their impact on sentiment. With benchmark lending rates so low relative to expected investment returns, lending was typically rationed by quota rather than price.
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