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在线翻译:
szdaily -> Business -> 
Central bank to tighten banks’ NCD debt issues
    2018-01-08  08:53    Shenzhen Daily

THE central bank is looking to restrict the issuance of negotiable certificates of deposit (NCDs) this year, sources with knowledge of the matter said Friday, as the government intensifies its campaign to reduce borrowing risks.

The People’s Bank of China advised banks via so-called “window guidance” to follow a new formula that puts a cap on NCD issues during the year.

Banks looking to issue NCDs in any given year must apply for permission from the central bank around the start of the year, specifying a maximum amount or annual quota that sets the limit on the amount of issued NCDs they can have outstanding.

Banks have been told their applications for 2018 quotas would be rejected if their interbank borrowings plus the requested amount of NCD quotas exceeded one-third of its total liabilities, the sources said.

NCD issuance has exploded in recent years as lenders, especially small ones, use this once loosely-regulated short-term debt instrument to fund longer-term investments, often through shadow banking. Outstanding NCDs exceeded 8 trillion yuan (US$1.2 trillion) last year, compared with around 3 trillion yuan at the end of 2015, according to Soochow Securities.

NCDs are issued by banks and traded between financial institutions in the interbank market. China opened its NCD market in 2013 as a means to help liberalize the country’s interest rate market.

Although China has already tightened scrutiny on NCDs since then — the central bank will include them in its quarterly risk assessments this year targeting banks with assets of more than 500 billion yuan (US$77.06 billion) — the new instructions point to a harsher stance as they now appear to target all banks.

The latest restrictions could force smaller lenders that are heavily reliant on NCD funding to shrink their balance sheets and liquidate some of their investments.(SD-Agencies)

 

 

 

 

 

 

 

 

 

 

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