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Or banks may cut lending.
They will thus have to put aside more capital, and cut lending.
To maintain capital ratios, banks can either try to raise more money or cut lending.
Many banks had cut lending to companies in which they encouraged the public to invest.
Now, China has ordered banks to cut lending for iron, steel, aluminum and automobile manufacturing.
Wholesale prices fell and banks cut lending in December as deflation picked up steam.
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The estimate implies that banks specialized in real estate development as of 1995 1997 cut their lending more in 2009, and that the drop in lending was mitigated if those banks operated in provinces with lower house price increases.
So they may cut their lending to companies.
When they did, borrowers defaulted and banks cut their lending.
The remaining, healthier banks cut new lending by 6 percent.
As a result, he says, they have already begun to raise standards and cut back lending.
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