Chinese government shifts to tough love for reckless lenders

The Chinese government seems to have shifted tactics in its support for lenders. Over the past 2 weeks, they have refused to inject more funds into the banking system despite a near tripling of short term money market rates as an over-levered system of bad-loans gasps for liquidity. Bankers and other investors have been begging for more bailouts, but so far the government has refused, apparently intent on correcting a culture of reckless behavior that has flourished since government liquidity injections began in 2008. This is new thinking indeed. Maybe other central banks are ready to follow suit? See: Echoes of Mao in China cash crunch