Amid China market stand off, calls for a more transparent central bank

China’s central bank rarely explains its actions in public and keeps markets guessing on policy, but the angst created by its stand off with banks in the money markets is prompting calls for it to change tack.

The People’s Bank of China (PBOC) let short-term interest rates spike to extraordinary levels this past week as it refused to inject funds into money markets.

Some observers saw it as an attempt to force banks to stop channelling money into the informal banking sector, known as “shadow banking”, which authorities worry is creating significant credit risks.

via Business feed http://www.scmp.com/business/banking-finance/article/1267770/amid-china-market-stand-calls-more-transparent-central-bank