China regulator to tighten supervision over shadow banking
City Index June 6, 2014 6:13 PM
<p>China’s banking regulator said it will further tighten supervision over the shadow banking sector and vowed to expand loans and cap borrowing costs.</p>
China's banking regulator said today (June 6th) it will further tighten supervision over the shadow banking sector, which regroups financial institutions that act like banks, but are not subject to the restrictions of bank regulation.
The China Banking Regulatory Commission (CBRC) also vowed to expand loans and cap borrowing costs in a bid to boost the supply of funds to the real economy, as the country's economy is showing signs of a slow down.
It will continue to support buyers of affordable housing, first-time home buyers and small-and medium-sized businesses.
CBRC's vice-president Wang Zhaoxing told a news conference that the regulator will improve ways to manage deposit-to-loan ratios, an indicator of a bank's ability to absorb risk and classify bad loans.
Industrial & Commercial Bank of China shares fell 0.2 per cent at the close of trading in Hong Kong, while China Construction Bank Corp lost 1.4 per cent and Bank of China slid 2.2 per cent.
The yuan climbed the most in a week in onshore and offshore trading as the People’s Bank of China raised its reference rate by 0.14 per cent to 6.1623 per dollar.
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