China’s financial regulators once again tightened restrictions on interbank lending to limit risks from the country’s shadow banking sector, Reuters reported. Effective immediately, banks can no longer make interbank loans that extend over three years and loans are not to be rolled over when they mature. The proportion of financing that comes from the interbank business must also not exceed a third of any bank’s total liabilities. China’s financial watchdogs also announced that all interbank loans must now be listed on balance sheets, after worries that loans were made under the guise of interbank loans to avoid regulatory scrutiny.
Categories