Thursday April 25, 2013

China watchful on wealth management products

BEIJING: China will heighten oversight on wealth management products in 2013 by taking a closer look at money flows off banks' balance sheets to reduce financial risks at a time when growth is slowing in the world's No. 2 economy.

The China Banking Regulatory Commission also said yesterday it remained committed to cutting risks from loans to local government financing vehicles this year, but stopped short of any detailed action.

”We will increase regulation on the structure and sales of wealth management products and keep monitoring where the money is channelled,” it said in its latest annual report.

Last month the regulator ordered banks to strengthen checks on the underlying assets of a range of wealth management products, and limited such assets to 35% of banks' total outstanding wealth management products, or 4% of their total assets, whichever is lower.

Late last year, an instrument sold through Hua Xia Bank failed to pay its annualised return, and China's CITIC Trust announced a payment delay on one of its products. - Reuters

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