Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

China regulator urges Beijing banks not to force liquidation of pledged shares: Yicai

Published 10/27/2018, 12:41 AM
Updated 10/27/2018, 12:50 AM
© Reuters. FILE PHOTO: An investor sits in front of displays showing stock information at a brokerage office in Beijing

© Reuters. FILE PHOTO: An investor sits in front of displays showing stock information at a brokerage office in Beijing

SHANGHAI (Reuters) - China's banking and insurance regulator has urged lenders in Beijing to avoid forced liquidation of pledged shares, as part of efforts to help stabilize the country's stock market, Chinese financial magazine Yicai reported, citing sources.

The Beijing branch of the China Banking and Insurance Regulatory Commission (CBIRC) said unrealized losses or lending risks associated with shares that banks hold as collateral against loans will not be part of regulatory inspections, according to Yicai.

CBIRC has also encouraged banks to further increase lending to listed companies facing temporary difficulties, Yicai reported.

CBIRC could not immediately be reached outside normal business hours.

In the past week, China has unveiled a series of measures to ease liquidity pressure at small and medium-sized enterprises struggling in a slowing economy clouded by the broadening Sino-U.S. trade war.

Underscoring the liquidity stress, about $620 billion of Chinese shares have been pledged for loans, putting companies under pressure as stock markets tumble and the prospect of forced liquidation rises.

© Reuters. FILE PHOTO: An investor sits in front of displays showing stock information at a brokerage office in Beijing

According to Yicai, lenders in Beijing have been urged to set up a dynamic mechanism to monitor risks of pledged shares and to defuse risks in a stable and orderly manner.

Latest comments

good news
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.