The China Banking Regulatory Commission (CBRC) will require banks to report detailed information on their holdings of wealth management products beginning in 2014, four sources with direct knowledge of the new regulations told Reuters on Friday.
Wealth management products (WMPs) are short-term investment products that Chinese banks market to clients as a higher-yielding alternative to traditional bank deposits. They have become a crucial element of China’s shadow banking system, which analysts warn has contributed to excessive debt growth that has led to a build-up of financial risk.
Many WMPs are recorded off-balance-sheet and are used to finance lending to risky sectors such as real estate developers and local governments, to which banks are otherwise discouraged from lending.
via <a href=”http://www.reuters.com/article/2013/11/22/us-china-banks-regulations-idUSBRE9AL0BS20131122?feedType=RSS&feedName=businessNews”>Reuters</a>
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