You are here

China to relaunch probe into margin trading, bank lending for stock speculation: sources

Wednesday, January 28, 2015 - 16:47

[BEIJING] Chinese regulators will relaunch an investigation into stock margin trading, and have been given notice banks to tighten supervision of their lending practices to ensure loans aren't funnelled into stock markets, sources with direct knowledge of the matter told Reuters.

The China Securities Regulatory Commission and the China Banking Regulatory Commission did not respond to request from Reuters seeking comment.

The news comes as Beijing moves cautiously to suppress the excessive use of leverage to make aggressive bets on Chinese stock markets, which have gained around 40 per cent since November.

Reports of previous investigations and regulatory clamp downs caused a dramatic collapse in stocks on Jan. 19, and regulators followed up by reassuring the market that they were not trying to suppress the rally.

REUTERS