© Reuters. FILE PHOTO: The Chinese national flag is seen in Beijing, China April 29, 2020. REUTERS/Thomas Peter
BEIJING (Reuters) – China has made progress in cleaning up non-compliant wealth-management products (WMPs), a senior regulatory official said on Saturday, as he declared a transition period in a years-long clampdown on the sector “basically complete”. WMPsare investment vehicles marketed by issuers including banks and property developers to retail and corporate investors, often paying yields far higher than deposits. They have come to prominence as some of China’s heavily indebted developers have faced a financial crisis. Cao Yu, vice chairman of the China Banking and Insurance Regulatory Commision told a forum in Beijing that non-compliant short-term wealth management products and products with principal guarantees had been eliminated by the end of 2021. The vast majority of banks, particularly small and medium-sized banks, had rectified their stock of WMPs on schedule, he said.
Cao said that financial trust products accounted for a steadily decreasing proportion of WMPs, with non-compliant trust products, used by some companies for financing, plunging more than 80%. Chinese regulators imposed sweeping rules on the asset management sector in 2018 to rein in bank wealth management products, part of a broad push to clamp down on large and frequently opaque financial risks.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.