An odd hush hangs over the soaring glass and steel headquarters of the Bank of China (BOC) in Beijing. The silence is deceptive. Although the lobby is empty, the meeting rooms are overflowing and the faces inside those rooms are drawn. China's second-largest bank is in turmoil. But it is in turmoil out of choice. China's banks have been mere conduits for pouring money into local governments and state-owned companies, with little regard for risk or profit. That must change, say the country's political leaders, bank regulators and bankers. A sign that more heed must be paid to the market came on October 28th. That day the central bank raisedinter-est rates for the first time in nine years. But it did more. It also lifted the ceiling on commercial loan rates, allowing banks to charge more to riskier borrowers.
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