Chinese Banks : Initiatives to keep the music playing

Chinese Banks : Initiatives to keep the music playing

  • August 2016-present: PBOC starts offering funds to banks at longer tenors and boosting money-market rates as a way of deterring companies from borrowing.
  • March 2017: The banking regulator asks lenders to submit reports on entrusted investments - funds that Chinese banks farm out to external asset managers.
  • April 10, 2017: The China Banking Regulatory Commission issues guidelines on stepping up risk control in the banking industry, requiring lenders to ensure stable asset quality, improve liquidity risk management, strengthen their bond and investment businesses and improve interbank operations.
  • July 15, 2017: President Xi says the central bank will play a stronger role in defending against risks and safeguard the financial system. China will set up a commission under the State Council to oversee financial stability and development.
  • Aug. 31, 2017: The PBOC bars financial institutions from issuing negotiable certificates of deposit with maturities longer than one year. NCDs, introduced in 2013 to help smaller lenders compete with big state banks for funding, have morphed into a way for banks to fund purchases of each other's debt.
  • Sept. 30, 2017: The PBOC announces reduced reserve requirements for banks on the condition that they lend to small business and rural borrowers. This is viewed as a direct challenge to the shadow banking industry. May free up about 600 billion yuan in new lending.
  • Nov. 17, 2017: Sweeping rules are proposed to curb risks in shadow banking products, partly aimed at breaking an implicit government guarantee that drove investment into WMPs. The regulations, set to take effect in 2019 after a consultation period, mark a shift in Chinese financial supervision.
  • Jan. 4, 2018: Market participants should "reasonably" control leverage in their bond trading, according to rule posted on PBOC website.
  • Jan. 5, 2018: Insurers should not guarantee investment returns or provide fixed returns when setting up equity investment schemes, the insurance regulator said.
  • Jan. 6, 2018: Banks must strictly separate entrusted loans made for clients from their proprietary operations and are not permitted to get involved in lending decisions or offer guarantees, under rules issued by the banking regulator.
  • Feb. 23, 2018: Insurance regulator to run Anbang for a year. Founder Wu Xiaohui to be prosecuted for "economic crimes."