China Construction Bank denies halt in new lending

Says it's operating smoothly.

China Construction Bank Corporation, China’s second largest bank and part of the Big Four, said it has not stopped issuing new loans amid a tightening of credit in China that has sparked reports some banks are refusing to lend.

CCB President Zhang Jianguo said the short-term panic of the credit crunch has eased.

"CCB is operating smoothly. We are still capable of giving funds to other banks via interbank (loans)," he said. "We are not stopping giving out any new loans."

Interest rates remain high and liquidity is tighter than normal despite government intervention, but the panic of a possible credit crunch that gripped the market last week has subsided, traders claim.