BEIJING—China is ratcheting up efforts to curtail credit growth in murky areas of its financial system, putting under scrutiny popular investment products that have flown under the radar of regulators. In the latest move, the central bank is requiring commercial banks to count high-yielding wealth-management products as part of their overall credit, according to a notice dated Oct. 20 that was reviewed by The Wall Street Journal. ...
PBOC (The People's Bank of China) is looking to rein in risk in China's $4tn market of high-yielding investment products being pushed out by commercial banks to ordinary savers. In a notice to banks, The People's Bank of China said commercial banks must count wealth-management products as part of their total credit, making them subject to capital and other regulatory rules, and the banks' risk exposures more transparent. The boom in wealth-Management products in China over the past four years has significantly increased the risk to banks, warn regulators, as many have expanded without increasing their capital cushions against defaults.