China issues fresh curbs on shadow banking
Jan 06 2014 , Beijing/Shanghai
The wide-ranging new rules issued by the State Council, China's cabinet, say that shadow banking is a "beneficial" and "inevitable" consequence of financial development and provides an official definition of the term, according to a copy obtained by Reuters.
The regulations contain new restrictions on banks' cooperation with trust companies, securities brokerages and other intermediaries with whom banks have cooperated in order to carry out off-balance sheet business.
Authorities also attempt to address the problem of banks' exploiting regulatory loopholes by clarifying the responsibilities of various regulators, the People's Bank of China, the China Banking Regulatory Commission, and the China Securities Regulatory Commission.
The rules also address internet finance, micro-lending, and informal lending by friends and family members.