ECON 162 Lecture Notes - Lecture 7: China Construction Bank, Time Deposit, Commercial Bank
26 Dec 2018
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Document Summary
Both the central bank and commercial bank. Central bank law and commercial bank law passed. More banks established but the big four continues to dominate. M0 = cash in circulation (narrow money) M2= cash + all demand deposit + all time deposit (broad money) Household bank deposits (household demand deposits + household time deposits) Increasing of financial assets as share of gdp. Chinese households have about 85% of financial assets in saving accounts very high. Whereas the us has a m2/gdp ratio hovering around 0. 5 china"s has been growing from 1 to almost 2 from 1989 to 2010. Investors securities market projects (households) firms. Bonds in securities market (government bonds, municipality bonds, corporate bonds) The most important part of china"s financial system. The banking system is dominated by the big four . State banks are state-owned enterprises, subject to more government intervention. Banks are special financial intermediaries with liquidity provision function.
