China has drafted rules banning banks from evading lending limits by structuring loans to other financial institutions so that they can be recorded as asset sales, two people with knowledge of the matter said.
The regulations drawn up by the China Banking Regulatory Commission impose restrictions on lenders’ interbank business by banning borrowers from using resale or repurchase agreements to move assets off their balance sheets, said the people, who asked not to be identified because they aren’t authorized to discuss the rules publicly. Banks would also be required to take provisions on such assets while the transactions are in effect.
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Bloomberg News via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/ijsUQYCPO4w/
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