Regulator asks China banks to cut wealth management yields
Move is an apparent back-pedalling on previous commitments to let markets price credit
Shanghai, Beijing
CHINA's banking regulator and main bond clearing house have asked commercial banks to reduce rates that they offer on high-yielding wealth management products (WMPs), five sources told Reuters, an apparent back-pedalling on commitments to let markets price credit.
The move to suppress returns on WMPs would reduce the cost of capital for cash-strapped firms relying on the industry for costly credit to stay afloat, and reduce the appeal of such products to retail investors, which could boost alternative investments such as Chinese stocks, which have had a dreadful start to 2016.
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