Deutsche Bank and BNP Paribas have become the first foreign banks to gain Beijing’s approval to lead underwriting for all kinds of onshore debt in China — the latest high-profile reform this year aimed at opening the financial sector of the world’s second-largest economy, said the Financial Times.
China’s National Association of Financial Market Institutional Investors, which regulates the interbank bond market, said in an announcement on Monday that the two banks had been granted type-A licences, allowing them to underwrite all varieties of RMB-denominated debt for both local and foreign companies.
The licenses grant greater access to China’s RMB 93 trillion ($12.9 trillion) domestic bond market, the latest move by Beijing to counteract a trade war with the US and concerns locally over hidden risks in the Chinese banking system.
Previously, BNP, HSBC and Standard Chartered had been granted type-B licenses, which permit lead underwriting for offshore RMB issuance, known as panda bonds. Deutsche Bank, Citigroup and JPMorgan, meanwhile, had underwriter licenses allowing them to participate but not lead on domestic deals.