Chinese Banks Didn't Object to New Asset Rules, Association Says
Chinese Banks Didn't Object to New Asset Rules, Association Says
(Bloomberg) -- China’s banking association is organizing discussions on the nation’s proposed new asset-management rules, the group said in a social media posting, dismissing as “untrue” reports that some lenders have submitted a petition to policy makers on the subject.
The statement comes after regulators last month proposed sweeping guidelines to curb risks in the nation’s $15 trillion of asset-management products, prompting a three-day drop in sovereign bonds and driving stocks to a two-month low before a late rally amid speculation state-backed funds would stem excessive losses.
The rules are scheduled to come into effect in 2019. Earlier this week, Reuters cited three people it didn’t identify as saying that some Chinese joint-stock banks had objected to the proposals, saying they would have a big impact on financial markets and possibly trigger systemic risks. The China Banking Association, in its WeChat post Friday, said it is helping formulate opinion on the draft.
The new rules will be applied to the 29 trillion yuan ($4.4 trillion) of wealth-management products issued by banks, 17.5 trillion yuan of trust products, as well as asset-management plans sold by insurers, fund managers and brokerages, according to the regulators’ statement. Institutions will be required to set aside risk provisions equivalent to 10 percent of the management fees, they said.
--With assistance from Jeanny Yu
To contact the reporters on this story: Belinda Cao in New York at lcao4@bloomberg.net, Robin Ganguly in Hong Kong at rganguly1@bloomberg.net.
To contact the editors responsible for this story: Stanley James at sjames8@bloomberg.net, John McCluskey
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