THE banking regulator is tightening disclosure rules on lenders’ wealth management products (WMPs) as it tries to track risky lending practices in the shadow banking sector, the latest in a series of steps by the government aimed at defusing financial risks.

The China Banking Regulatory Commission (CBRC) said in a notice late Monday it plans to launch 46 new or revised rules this year, part of which targets risks related to shadow banking activities.

Authorities are trying to better regulate 30 trillion yuan (US$4.35 trillion) in WMPs, much of it sitting off-balance sheet in the shadow banking sector. The WMPS have been used to channel deposits into risky investments, often via many layers of asset management programs to skirt lending and capital rules.

The CBRC will now require that banks report the underlying assets and liabilities of their WMPs, as well as all layers of investment programs, on a weekly basis. Previously, banks were required to hand in less detailed information, and on a monthly basis.

The new rules — published by a WMP management platform under the CBRC — reflect regulators’ desire to have a full picture of banks’ activities, and could slow the growth of WMPs.

In March, China’s newly appointed banking regulator Guo Shuqing vowed to strengthen supervision of the lending sector, underscoring government determination to fend off financial risks and push reforms this year.

Separately, the CBRC unveiled a long list of rules it aims to publish this year, many of these related to risk management.

The rules are to “ensure that (risk) does not become systemic,” the CBRC said.

The new and revised rules cover a variety of financial institutions from trust firms to banks including regulations covering bankruptcy for commercial lenders and trust management.

(SD-Agencies)