It's the credit squeeze China had to have

China's new leaders have picked a tough test for their economic management skills: the runaway shadow banking system.

China initiated a credit squeeze last Thursday when the People's Bank of China (PBOC) ignored a sharp rate spike on the interbank market.

It was the right call, because failure to move against runaway credit growth now would mean a systemic crisis not too far down the track.

Read the full article: It's the credit squeeze that China had to have (subscription required)