While the most serious liquidity problems occurred outside traditional commercial bank lending and borrowing activities, the crisis revealed significant fragilities in financial institutions' extensive use of short-term repurchase agreements and reverse repurchase agreements to finance large portions of dealer inventory and trading positions.
As a result, they are in a better position to extend more liberal credit to enterprises operating in China and finance construction of substantive infrastructures. In the 13 months ending January 2010, banks on the Mainland of China extended new credit valued at RMB11 trillion. The results of all these tremendous stimulus packages, both fiscal and monetary, were spectacular.