China has established an insurance fund for its $2.1trn for trust sector to mitigate financial risk in shadow banking sector, the China Banking Regulatory Commission (CBRC) said.
Known as the China Trust Protection Fund (CTPF), the professional body was jointly set up by the China Trustee Association (CTA) along with 13 other trust companies and has a registered capital of CNY11.5bn (US$1.9bn).
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The fund, which will be chaired by Xu Zhichao, an ex-deputy president of the Cinda Asset Management Co, will supplement China’s existing securities, insurance and commodity futures insurance funds.
Additionally, China is also planning to launch its first deposit insurance fund to protect bank customers.
CTPF will be responsible for raising further capital as well as the management and use of its finances.
CTA said that China’s trust assets reached CNY12.95trn ($2.09trn) at the end of September, up 18.7% from the end of last year.
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