The China Banking Association denied reports that some banks sent a petition opposing proposed changes to asset management rules, Bloomberg News reported Dec. 8, citing a social media post by the group.
In a WeChat post, the group dismissed the reports as "untrue" and said it is organizing discussions on the proposed rule changes to formulate opinion on the draft.
The statement came after Reuters reported the same day that 10 Chinese banks raised objections on the proposed changes, saying it would have a big impact on financial markets and could even "trigger systemic financial risks." The bankers are concerned that the removal of implicit guarantees on these products, among other things, could force banks to off-load assets beforehand at a discounted rate, and ask clients to repay loans before their due date, resulting in liquidity risks and increased market volatility.
In November, the People's Bank of China released draft guidelines to tighten regulations on asset management products in order to curb potential risks from the use of such products. The new rules would remove implicit guarantee of fixed returns on asset management products, which banks use to generate funds for investments in stocks, bonds and non-standard debt assets.
The rules are scheduled to take effect on June 30, 2019.
As of Dec. 8 , US$1 was equivalent to 6.62 Chinese yuan.
