CBRC Tells Banks to Limit Investment in Local Government Bonds

China’s banking regulator told lenders to be “cautious” when investing in bonds issued by local government financing vehicles as policy makers seek to rein in local borrowing.

The China Banking Regulatory Commission has capped at end-2012 levels LGFV loans by banks, which are banned from providing guarantees to the entities’ bonds, Cao Guoqiang, Vice President of China Citic Bank Corp., said at a teleconference.