Banking regulator calls for creditor committees

Caixin reports amid mounting corporate debts and defaults, China’s banking regulator has stepped into the fray, urging banks that are creditors of heavily indebted companies to coordinate their actions and negotiate together. The China Banking Regulatory Commission (CBRC) issued a notice on Friday that told banks to set up creditor committees not only to protect their rights but also to help companies struggling to repay their debts to get back on their feet. Although the notice was aimed at banks, other financial institutions approved by the CBRC can also participate. A committee, which should be “temporary,” “consultative” and “self-regulating,” should be comprise at least three creditor banks and should conduct negotiations with a company on behalf of the banks to work out a debt restructuring plan, the regulator said.