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People's Daily Online>>China Business

Banks' reserves 'can be invested

By Chen Jia (Chinadaily.com.cn)

15:52, March 13, 2012

The cash reserve requirement imposed on banks by China's central bank can be injected into the stock market to boost investor confidence, Jiang Lianhai, a deputy to the National People's Congress said on Monday.

"This capital can be seen as a macroeconomic strategic instrument without the purpose of making profits," said Jiang, who is also the leader of the Securities Association of Jilin province.

Jiang suggested that the banks' capital could be directly invested into the stock market as a buffer fund that can help it avoid fierce fluctuations.

"Another way is to provide the money to securities and fund companies, indirectly invested into the shares," he added.

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PD User at 2012-03-13183.39.34.*
CPC must learn the very sour and uugly lessons of the USA and EU wherein banks and financial institutions were allowed to get mixed up in the stock exchanges and other vehicles to boost parked funds (*cash reserves*) of banks. What are going wrong now with the financial states of all such financial institutions of the USA and EU? Is a very risky situational proposal with stock (shares) plays of banks may mislead the public, mums and dads!!!
  

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