20 September 2018

China to rein in bank evasion of lending limits, Bloomberg says

China has drafted rules banning banks from evading lending limits by structuring loans to other financial institutions so that they can be recorded as asset sales, Bloomberg reported Tuesday, citing two unnamed sources. The rules drafted by the China Banking Regulatory Commission ban borrowers from using resale or repurchase agreements to move assets off their balance sheets, the report said. Banks would also have to limit their total lending to other financial institutions to half of their total deposits, and cap loans to non-bank financial companies at 25 percent of their net capital, it said.

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