China Banks Halt Lending to U.S.

The South China Morning Post reported on Thursday that domestic banks have been told by Chinese regulators to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis.

The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

"The decree appears to be Beijing's first attempt to erect defenses against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.

A spokesman for the CBRC had no immediate comment