China to Keep Building Shibor as Benchmark Rate, PBOC Says
China will encourage commercial banks to develop derivatives based on the Shanghai interbank offered rate, or Shibor, said Li Dongrong, assistant governor of the People’s Bank of China.
The country will continue Shibor as a benchmark reference rate for its financial markets, according to a statement posted today on the central bank’s website.
Lenders should “reasonably” guide market rates and exercise self-discipline as the government reduces price controls, the statement said.
Some banks “sharply” raised yields on wealth management products and lifted deposit rates “under disguise” as competition intensified this year, Li said in the statement. Such practices will lead to “frequent, large-scale” fund transfers between lenders, disrupting financial order and hampering the prevention of systemic risk, he added.
--Zhang Dingmin. Editors: Paul Gordon, Joshua Fellman
To contact the Bloomberg News staff for this story: Zhang Dingmin in Beijing at Dzhang14@bloomberg.net
To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net
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