New rules brought in last month to rein in growing risk in China’s asset management industry is already taking effect as banks issue fewer and fewer new wealth management products (WMPs), a new report shows.
In April banks sold 10,849 new WMPs – a 7% drop from the same time last year and 20.4% fewer than in March, Caixin Global reports.
Seasonal factors also contributed to April’s dip, but the introduction of the new rules on the 27th by China’s financial regulatory body also had an immediate impact. In the last three days of the month fewer than 100 new WMPs were sold compared to several hundred being sold daily before the rules’ publication.
The rules intend to mitigate the mentality among some Chinese investors that investors will compensate for excessive risk-taking, encouraging more responsible asset management in the $16 trillion industry.