Banks to get wider loan investor pool

Chinese banks could in the near future be able to sell loans to a new range of investors, including non-bank financial institutions and large companies, Reuters reported, citing unnamed sources. The banking regulator will introduce a “credit transfer system” in the country’s interbank market. Banks can currently sell non-performing loans in private deals, mostly with big state-backed asset management firms, or roll them indefinitely to avoid booking a loss. By drawing in private capital, this move could help the government reduce its costs in a potential bailout of banks.