Chinese banks have been skirting more-stringent requirements on capital and loan-loss provisioning by disguising loans routed through non-banks, or so-called “channels,” as asset-management plans (AMPs). AMPs fetch high returns from investing in high-risk local government financing vehicles, less-capitalized property projects, or companies whose credit profile is too weak to secure conventional bank loans. These disguised loans stay off many debt indicators. Channel lending, which is still legal in China, has been in overdrive since late 2012, when securities brokerages, insurers and asset managers were gradually allowed to be banks’ “channels” alongside trust companies. Channel loans made through securities brokerages, mutual funds and their subsidiaries stood at 21.45 trillion yuan ($3.15 trillion), but the total size is unknown. In February, the PBOC proposed a long-awaited overarching regulatory framework on wealth- and asset-management industries that include channel lending. The framework aims at an outright ban on channel lending, but according to Caixin it is unclear when it will come into force.