The National Association of Financial Market Institutional Investors, an industry body backed by China’s central bank, has consulted major banks and brokerage firms in recent weeks about the planned rollout of credit-default swaps, according to The Wall Street Journal. The swaps would pay out if the issuer of a bond or a loan defaults, said the people, who were briefed by the regulator on the matter. The regulator, which oversees China’s $8.5 trillion interbank bond market, has drafted guidelines and standardized contracts for the product, one that has in the past two decades become a key tool in global markets to hedge government and corporate debt, sources said. The planned rollout of rules for CDS reflects the pressures China faces as it tries to attract more investors.
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