Part 3/7:
Liquidity Issues Raising The Alarm
Traditionally, during financial hardships, banks could rely on liquidity support from the government. Yet, the People's Bank of China (PBOC) has faced challenges injecting enough liquidity into the banking system to alleviate current tensions. The dire liquidity situation is exemplified by soaring money market rates and a scramble by institutions for cash— with reports of some entities paying as much as 10% to secure short-term funding.