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Report: Chinese regulator scrutinizes shadow banking, interbank activities

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Report: Chinese regulator scrutinizes shadow banking, interbank activities

China's insurance and banking regulator is conducting checks into the shadow banking and interbank activities of financial institutions, Reuters reported May 30, citing local newspaper China Securities Journal.

The move comes amid the China Banking and Insurance Regulatory Commission's plan to step up oversight to reduce financial risks and curb shadow banking developments.

Sources reportedly said the checks focus on the companies' channel businesses, which are financing services designed to help transfer deposits into risky investments through products often designed to dodge capital or investment regulations.

The move has prompted some trust companies to suspend their channel businesses, the report noted.

This comes after the watchdog recently revised its liquidity risk management rules for commercial banks, which introduced three quantitative indicators to better help lenders guard against liquidity risks.

It also follows the release of new disclosure rules for insurers, under which insurance companies are required to publish information of controlling entities on their official websites and disclose information on shareholders who own a stake of at least 5%, as well as the resume of directors and supervisors.