It's a fractional reserve system with no reserve requirements and no central bank control.
The government has also imposed a clutch of new taxes on lending and stricter reserve requirements.
That is partly because reserve requirements and interest rates are the highest in the world.
With this, and higher bank reserve requirements, inflation has dropped to 3.2 percent year-on-year for February.
Chinese banks whose business is being squeezed by high reserve requirements are continuing to raise cash.
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Raising reserve requirements even further might not have enough of an impact to slow consumer lending.
Banks are thus forced to go to the Fed for money to cover their funding and reserve requirements.
High reserve requirements, which force banks to park much of their capital with the Central Bank, helped too.
It is shutting off lending to land developers and has raised bank reserve requirements five times this year.
The central bank has raised reserve requirements in a bid to restrain lending, but to no great effect.
In other words, they tighten with reserve requirements and ease with open market operations in the foreign exchange market.
China had already begun to implement tightening measures when it raised interest rates and increased reserve requirements last month.
Two, they have forced banks to reduce lending by increasing reserve requirements dramatically.
China will continue raise reserve requirements along with interest rates, but these efforts to dampen inflation will be futile.
In addition, the Chinese continue to tighten monetary policy via the announcement of another hike in bank reserve requirements overnight.
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The central bank has cut bank reserve requirements three times since November 2011 and cut interest rates even more often.
In November, the PBOC hiked interest rates for the first time since 2007, and pushed bank reserve requirements to 18.5%.
Brazil reduced reserve requirements and gave banks and its deposit-insurance fund incentives to buy up the loan portfolios of smaller banks.
Last September, the central bank went a step further, raising the reserve requirements for banks in the hope of curtailing lending.
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Last year, there were two interest-rate hikes both a quarter of a point and six increases in bank reserve requirements.
Fidelity sidesteps bank industry nuisances like reserve requirements, Dodd-Frank and anti-redlining laws.
In the face of deflation, the 1930s Fed knew it needed to expand the money supply by lowering reserve requirements at banks.
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Like other countries, China can raise interest rates and bank reserve requirements.
The firm is the only one allowed to set its own reserve requirements--rather than have them imposed by regulators--for highly volatile derivatives trading.
Adding to concerns was a weekend increase from the Peoples Bank of China in the reserve requirements it sets across the banking system.
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The PBOC also raised reserve requirements on banks six times in 2010, obliging them to set aside 18.5% of their deposits, a record ratio.
They have lifted reserve requirements for banks, hectored speculators and ordered lending to the steel, cement and car industries, among others, to be cut.
The Bundesbank believes that minimum reserve requirements give a central bank tighter control over bank lending and help to smooth out money-market interest rates.
High bank reserve requirements of as much as 20% for timed deposits and 12% for current accounts keep banks from lending out too much money.
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China raised bank reserve requirements for the third time this year.
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