Stock Market Today - China Looks to Boost Economy, Lowering Lending Costs

About 45% of new corporate debt in China to pay old debt. Also: ECB's president said the central bank is ready to employ all tools to fight low inflation.
By Antonia Oprita ,

NEW YORK (TheStreet) -- China will lower the costs of funds used in its standing lending facility (SLF) to inject cash in the economy, in an attempt to stimulate its economy. The overnight rate would be cut to 2.75% and the seven-day rate to 3.25%, from 4.5% and 5.5% respectively, the People's Bank of China (PBOC) said in its official microblog.

  • Around 45% of new corporate debt in China will be used to pay old debt, Bloomberg reports. The article likens around $1.2 trillion worth of loans, bonds and shadow finance being raised to cover interest payments on existing debt to a giant Ponzi scheme.
  • Bailed-out Dutch bank ABN Amro saw its shares rise in their first day of trading after its IPO on the Amsterdam Stock Exchange, which valued it at $17.9 billion. The bank has returned to public markets seven years after having been nationalized at the height of the financial crisis.
  • European Central Bank (ECB) President Mario Draghi said again that the central bank stands ready to employ all tools at its disposition to fight low inflation. The Wall Street Journal said the fact that he referred to the already-negative deposit rate in his speech to a banking conference indicates that the ECB may be willing to cut the rate even further.
  • UK public sector borrowing jumped in October. Net government debt at the end of last month was 1.5 trillion pounds ($2.3 trillion) or 80.5% of GDP, 70.4 billion ($107.5 billion) higher than the same time last year.

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