Indiana Grain Company, LLC

Posted: 01/26/10

By: tomgrisafi

China has officially implemented an increase in required reserves for some banks today. This led to a large sell-off of Asian stocks, and this reiterated how closely global markets react to Beijing's monetary policy.

According to Bloomberg, the Bank of China, and China Construction Bank Corp. were advised to restrict new loans.

Industrial and Commercial Bank of China, the country's largest lender, also ordered its Beijing branches on Friday not to issue new loans for the rest the month, Dow Jones reported.

Per BusinessWeek, The China Banking Regulatory Commission last week said lenders that failed to meet any of more than a dozen regulatory requirements have been told to limit lending.

Despite China's last year enormous growth in credit, the regulators can manage the risk said chairman of the Chinese Banking Regulatory Commission Liu Mingkang.

None the less, investors all across the world will be keeping a close eye on China, and the effects they may have on the global economy.