According to the Bank for International Settlements(BIS), total cross-border bank lending to China decreased $63 billion to $698 billion at the end of the first quarter of 2016.
In contrast, bank loans in Japan significantly increased towards the beginning of 2009 against the backdrop of the decline in firms' sales and the shrinkage of CP and corporate bond markets.
Banks' lending continued to decline by 2-3 percent year on year, and the amount outstanding of CP and corporate bonds issued was recently moving at close to the previous year's level.
Financial environment With regard to credit aggregates, private banks' lending continued to decline by about 2-3 percent on a year-on-year basis, but the pace of decline was slowing slightly.
Financial institution lending has gradually grown, and financial intermediation through financial markets has been prevalent, as seen in the issuance of corporate bonds and equity financing.
During the 12 months up to October, the lending of financial institutions decreased by 8 trillion yen, whereas fund raising in the corporate bond market and CP market increased by 5 trillion yen.
Cross-shareholdings and bank lending to related parties remain complex issues, unless local banks adopt strong corporate governance and risk management standards.
The year-on-year rate of decline in private banks' lending was accelerating, while fund raising through issuance of corporate bonds and CP continued to exceed the level of the previous year.
Under these circumstances, the rate of decline in lending by private banks has been diminishing at a moderate pace, and the amount outstanding of CP and corporate bonds issued has recently been around or slightly above the previous year's level.
Under these circumstances, the rate of decline in lending by private banks has been diminishing, and the amount outstanding of CP and corporate bonds issued has recently been around or slightly above the previous year's level.
In the case of Japan, financial institutions extend loans to a firm as a whole, known as corporate lending, rather than to individual projects as in the US.
The rate of decline in lending by private banks has been diminishing slightly, and the fund-raising environment for firms in the capital market through corporate bonds and CP continues to be favorable.
That is to say, in a situation where the lending attitude of financial institutions is becoming more active, the rate of decline in lending by private banks has been diminishing at a moderate pace.
Under these circumstances, the amount outstanding of CP and corporate bonds issued continues to be above the previous year's level, and the rate of decline in lending by private banks has been diminishing slightly.
As a result, credit demand in the private sector continued to be weak. Under these circumstances, private bank lending remained sluggish, and the year-to-year growth rate of money stock(M2+CDs) had declined to around 3.5 percent.
The amount of corporate bond issuance decreased somewhat in April and May, although it remained at a high level. Bank lending continued to increase strongly, but surveys revealed that the lending attitude of banks had become slightly more severe.
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