Wealth products tightened to trim risks
Source: Xinhua |
May 3, 2013, Friday
|
Print Edition
Print Edition
CHINA'S banking regulator has moved to tighten its regulation over banks' wealth management products to dissolve risks in the shadow banking system that may jeopardize the country's financial stability.
The China Banking Regulatory Commission said yesterday that it would strictly control the direction of investment by wealth management products to ensure such investments are in line with macro and industrial policies and support the physical economy.
The CBRC vowed to closely monitor bank operations using money pooled from sales of wealth management products, short-term financial products yielding a much higher rate than bank deposits.
The benchmark interest rate of one-year deposits stands at 3.25 percent.
Such wealth management products are considered an important part of China's shadow banking system, a complex and unregulated sector that has emerged and grown significantly in the country over the last few years.
The CBRC ordered banks to fully disclose information on wealth management products and vowed to tighten oversight over sales of such products through covert investigations.
Risk warning must be prioritized and unauthorized sales and misleading words are prohibited in selling such products, according to the CBRC.
The China Banking Regulatory Commission said yesterday that it would strictly control the direction of investment by wealth management products to ensure such investments are in line with macro and industrial policies and support the physical economy.
The CBRC vowed to closely monitor bank operations using money pooled from sales of wealth management products, short-term financial products yielding a much higher rate than bank deposits.
The benchmark interest rate of one-year deposits stands at 3.25 percent.
Such wealth management products are considered an important part of China's shadow banking system, a complex and unregulated sector that has emerged and grown significantly in the country over the last few years.
The CBRC ordered banks to fully disclose information on wealth management products and vowed to tighten oversight over sales of such products through covert investigations.
Risk warning must be prioritized and unauthorized sales and misleading words are prohibited in selling such products, according to the CBRC.
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