China has strengthened support for the banking system

US, WASHINGTON (ORDO NEWS) — The People’s Bank of China provided 56.1 billion yuan ($ 7.9 billion) of liquidity for the banking system, while reducing the cost of targeted medium-term lending (TMLF) by 20 basis points to 2.95%.

The world could be threatened by the Great Depression, according to the People’s Bank of China. The regulator noted that the probability of this, of course, is small, but it cannot be ruled out.

“The possibility of the Great Depression cannot be ruled out if the epidemic continues to get out of control and the deterioration of the real economy is compounded by the collapse of financial risks,” said Zhu Jun, director of the People’s Bank of China International Department.

The difficult compromise between the need to protect public health and the economic costs associated with closing almost all production (and not only) activities has led many economists to reconsider their forecasts regarding the effects of the economic shock from COVID-19. They believe that the result may be more serious than the global financial crisis of 2008, or even the Great Depression.

The latter began with a collapse on Wall Street in 1929, which led to the freezing of credit markets, massive bankruptcies, a drop in US GDP of more than 10% and 25% unemployment.


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