Cheap loans! If only. China’s removal of the floor on commercial lending rates on Saturday was never going to boost the markets. Any move that could shrink the net interest margin of banks will not be welcome by investors. But in a wider economic sense, the move is a positive.

The central bank announced three measures. The most important was removing the floor on commercial loans, which had been set at 70 per cent of the benchmark. But the immediate impact will be limited.

There is still a floor on mortgage lending. And only 11 per cent of total loans were set below the benchmark rate in the first quarter, with two-thirds above. The lowest rate charged by commercial banks was 90 per cent of the benchmark, estimates Jefferies. That hardly implies a flood of easy money. More than a fifth of loans were being set below the benchmark in 2009 and 2010, at the height of the last lending boom. Some borrowers will probably benefit this time, such as state-owned enterprises or clients with the heft to demand better rates. Last month’s credit crunch could have pushed average one-year rates up about 75 basis point to 8 per cent, according to Capital Economics. As a result this is a very small stimulus for the economy.