China seeks to allay fears of credit crunch

FILE - In this Wednesday, March 13, 2013 file photo, Chinese paramilitary policemen stand on duty outside the People's Bank of China in Beijing, China. Pressures appeared to ease somewhat on Friday, June 21, 2013 as the key interbank lending rate dropped slightly, prompting speculation that the central bank had intervened, possibly through open market operations, to inject more funds into the system. The People's Bank of China generally does not comment on its market activities. (AP Photo/Ng Han Guan, File)

SHANGHAI: China’s central bank said it will not turn the screws too hard on banks in its drive to curb easy credit, seeking to allay fears of a banking crisis that had driven shares to their lowest in nearly 4½ years.

The People’s Bank of China (PBoC) wants to curtail the diversion of funds to a vast informal loan market as it seeks to shore up growth in the world’s second largest economy, but its tough stance has raised fears of a lasting credit crunch.