China is cracking down on banks and brokers that it suspects of inflating bond trading volumes in an effort to win more business, according to traders familiar with the matter.
A subsidiary of the central bank is monitoring large transactions on the X-Bond system for signs of abnormal trading, the two traders said, asking not to be named as they’re not authorized to speak to media. The checks started after turnover on a China Development Bank note spiked to a record on July 16, according to the people. Daily volume on that contract has fallen by a third since.
