According to the Associated Press, Chinese banks are expected to trim lending to $1.09 trillion in 2010, down from the $1.39 figure of last year. This announcement came after the Peoples Bank of China unexpectedly hiked the reserve requirements for banks by 50 basis points last week. The new reserve requirements took effect on January 18.
Last week, IMF Chief Dominique Strauss-Kahn warned world governments against withdrawing liquidity too soon, although he did state that economies in Asia are leading the recovery.
