China Regulator Fines Bank of China for Risk-Management Flaws
China’s financial regulator fined Bank of China Ltd. 50.5 million yuan ($7.7 million) for risk-management transgressions after the price of one of the lender’s crude oil futures products collapsed, triggering a $1 billion loss for its clients.
China’s banking and insurance regulator suspended the bank’s operations related to the futures product and urged the bank to strengthen its risk management, it said in a statement on its website Saturday.
Bank of China said in a statement on its website Saturday that it accepts the penalty and will improve its risk management and legal operations.
Bank of China’s “Crude Oil Treasure” product attracted thousands of retail investors seeking to speculate on West Texas Intermediate crude futures. The product collapsed on April 20, when the price of the May futures contract plummeted to a record minus $37.63 a barrel.
©2020 Bloomberg L.P.