PBOC to ask lenders to control wealth management funds

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 2, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - As Bloomberg reports, the People’s Bank of China (PBOC) held a meeting with large commercial banks Monday, and informed the lenders that it will also impose tighter control on the amount of wealth management product funds they give to brokerages and other financial institutions to manage.

    He Xuanlai, Singapore-based credit analyst at Commerzbank AG noted, “This is clearly aimed at controlling risks in the banking sector. It’s not a standalone move; it’s actually in line with the tightening in bill-financing, following recent media reports of fraud cases."

    He added, “As investors unwind positions to meet regulatory requirements, liquidity is likely to dry up in the next few weeks, weighing on bond market performance. The PBOC may also need to inject additional funds into the market to offset the de-leverage."
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