China bank regulator cracks down on improper bad debt transactions

Beijing

CHINA'S banking regulator has tightened up its scrutiny of the country's distressed asset managers in a bid to crack down on improper bad debt transactions with commercial banks, an internal document reviewed by Reuters shows.

China's asset management companies (AMCs) are prohibited from signing with banks any private agreements, including implicit repurchase guarantees, which would distort the transaction structure or change the risk-bearing party of non-performing loans (NPLs), the China Banking Regulatory Commission (CBRC) said in the document.