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China banks' wealth management products given bond, stock market entry: sources

[HONG KONG] China will allow wealth management products sold by its commercial banks to enter the domestic bond and stock markets, in a move to encourage direct investment through these products instead of through trust companies, two sources with knowledge of the upcoming changes told Reuters on Thursday.

The banking regulatory commission also asked banks to set aside funds to guard against potential risks, a banker and a source close to the regulator said.

China's shadow banking sector continued to grow at breakneck speed in 2013 and now ranks as the third largest in the world, a report released by the Financial Stability Board showed earlier.