The Chinese Central Bank Freaked Out Over A Bank Lending Spike Unlike Anything It Had Ever Seen Before In History

The final two weeks of June were characterized by market turmoil that seemed to stem from the actions of two central banks. First there was the Fed actions. Talk of the "taper" caused US interest rates to jump and equity markets to fall, as traders started to anticipate monetary tightening at an earlier date than previously thought. But at the same time, in China, there was a spike in SHIBOR (which is China's equivalent of LIBOR) which screamed cash crunch for China's banks. That too freaked mar...