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在线翻译:
szdaily -> Markets -> 
New rules for WMPs may be delayed
    2018-07-10  08:53    Shenzhen Daily

THE government may delay the release of new regulations for banks’ wealth management products (WMPs) because of recent market turmoil, financial publication Caixin reported Sunday, quoting unidentified sources.

The new rules were expected to be announced between late June and early July, Caixin said. One source told the publication that regulators have opted to hold off on releasing the new guidelines and wait for a “while” because of the market volatility.

Sources familiar with the matter said in May the China Banking and Insurance Regulatory Commission (CBIRC) will soon publish the rules as part of a broader push to curb financial sector risk. Official data showed 562 banks held 29.54 trillion yuan (US$4.45 trillion) in outstanding WMPs at the end of 2017.

CBIRC is likely to adjust the limit for bank wealth management products’ exposure to non-standard investments, known widely as “shadow banking” products, one of the sources said at the time.

But Chinese markets have swooned in recent weeks on worries about a trade war between China and the United States, with the two governments implementing a new set of tariffs Friday.

China’s regulators have toughened their stance on market irregularities, targeting risky business such as shadow banking.

In May, the CBIRC imposed a total 183 million yuan (US$29 million) in fines on China Merchants Bank Co., Industrial Bank Co. and Shanghai Pudong Development Co. for transgressions including lax lending practices and understating of risky assets related to WMPs.

They represent the largest fines since China reshuffled its financial supervisory regime in March by combining the banking and insurance regulators.

In April, the central bank tightened regulations on asset management businesses of financial institutions.

The rules released by the central bank unify regulatory standards for asset management products and address issues such as implicit guarantees by banks on many WMPs.

While the rules give financial institutions until the end of 2020 to fully reform their practices, risks in existing business may be gradually exposed, and more fines could be imposed, analysts said.

Greater regulatory scrutiny could cut into banks’ profitability by limiting their business opportunities, forcing them to bring more loans back onto their balance sheets and weakening their capital strength, Fitch Ratings warned in January.

(SD-Agencies)

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