The ups and downs of the Macau casinos may soon see another down with China signalling that it will be tightening up the access to credit in the coming months. China’s administrators have asked the major banks to increase their reserve ratios for excessive lending and asking some of them not to issue new aggressive loans to corporations.

This type of reduction in liquidity and increased borrowing cost always leads to a slow down in the economy and will have an instant effect to the businesses like casinos who both require good times for patrons to spend big and bank credit in order to further their own expansion projects. Last year both Sands and Wynn floated their shares in initial public offerings to attract more capital, MGM plans to do the same. With a credit crunch it might mean that their expansion plans have to be put on hold once again.

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