(Adds fresh quotes)

By Kevin Lim and Lucy Hornby

SINGAPORE, Nov 13 (Reuters) - The chairman of the Industrial & Commercial Bank of China, the world's largest by market capitalisation, said a stronger yuan would not be conducive to the global recovery, and defended the wisdom of a rash of lending by Chinese banks this year.

China's central bank earlier this week signalled it would consider shifting from an effective peg to the U.S. dollar, which has been in place since mid-2008. The People's Bank of China said it would consider major currencies, and not just the dollar, when guiding the exchange rate []ID:nSP466424].

"I personally believe that an appreciation of the renminbi is is not conducive to smooth global economic recovery at this moment," Jiang Jianqing told reporters during the Asia Pacific Economic Cooperation forum on Friday, referring to the "people's money" or yuan.

"The global economy is still very unstable, off-balance. So stability in currencies and consistency in currency policies is very important, and should not be changed abruptly."

ICBC (1398.HK: Quote, Profile, Research) and other Chinese banks have sharply increased lending this year in line with the Chinese government's stimulus policies to stave off the financial crisis. ICBC's loans could double this year compared with last, Jiang said, although he noted loan growth was slowing from earlier in 2009 [ID:nPEK304345].

Jiang said infrastucture investments enabled by the stimulus could lay the foundation for China's growth over the next 10 years, shrugging off concerns by many analysts that the stimulus measures have worsened already severe overcapacity in some sectors.

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