Chinas banking regulator reportedly plans to crack down on illegal practices in the wealth management sector, including banks purchasing each others wealth management products or investing client funds in other banks wealth management products.
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The ‘crackdown’ was reported in The Wall Street Journal, and is said to form part of the China Banking Regulatory Commissions (CBRC) goal of tightening its control over nonbank financial institutions and maintain a tight monetary policy.
The CRBC reportedly aims to tackle the issue in the second half of this year.
Banks sale of investment products to customers in China is an issue because the CBRC is said to be concerned that investment products with higher returns may be channelled into higher risk areas, such as property and may not be as safe as investors believe.
A spokesman from the CBRC was unavailable for comment about the reported crackdown on illegal practices in the wealth management sector.
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By GlobalData
