China bank regulator tells lenders to rein in risks

Shanghai

CHINA'S banking regulator has urged lenders not to pay out extraordinary dividends and to limit their local government debt exposure, two people with direct knowledge of the matter told Reuters on Monday.

The China Banking Regulatory Commission said that banks' retained profits should be used primarily to replenish core tier 1 capital.

Lenders should also require local governments to reflect their full-scale debt obligations in their fiscal …