The Chinese government is planning a target of $1.1 trillion as loan money for the year 2011. This move was a result of successive talks between the US government and the Chinese government. The Chinese government is looking for an inflation of 4 percent and an economic growth of 8 percent.
The Bank of America (NYSE:BAC) and UBS (NYSE:UBS) had estimated a much lower quota than the $1.1 trillion that was announced. The new loan of $1.1 trillion will in fact help the banks to set aside three or five times more reserves. The Chinese stocks rose immediately preceding this announcement as a sign of investor’s trust in this move.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.