Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
However, the PBOC seems to have provided liquidity on Friday to ease frozen interbank lending, bringing the SHIBOR down 5% in one go.

HULK SMASH with a soft touch?

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Jun 23rd, 2013 at 04:38:06 AM EST
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However (2):

Here's The Message From The People's Bank Of China That Sent Stocks Cratering - Business Insider

Shanghai shares got crushed last night, and financials were really hard hit.

One culprit: The People's Bank of China is showing that it's very disinclined to step in and smoothe over tight liquidity conditions.

Instead it's telling the banks to deal with their own mess.

Nomura's Zhiwei Zhang passes allong the message from the PBOC in a brief note

The guidance note stated that "overall bank liquidity conditions are at a reasonable level" and asked banks to "prudently manage liquidity risks that have resulted from rapid credit expansion", "appropriately contain the pace of loans and bill financing" and "utilize the stock of money and credit to support the economy". We believe these statements suggest that the central bank's policy stance remains tight. The decision to put this note on its website suggests the PBoC wants to reiterate its policy stance.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jun 24th, 2013 at 07:22:56 AM EST
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A commenter on Blood & Treasure suggested that the purpose of the "event" was to:

a) "pull the water out of the pool and see who had no trunks on"

and then

b) set the government inspector division on them...

Which seems plausible if unsubtle...

by Metatone (metatone [a|t] gmail (dot) com) on Mon Jun 24th, 2013 at 09:11:57 AM EST
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Still and all, SHIBOR continues to drop back rapidly from its spike, -200bp on the overnight rate today.

Perhaps they're pouring some water back in now they've identified the bare bums.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jun 24th, 2013 at 09:45:32 AM EST
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