China Scrutinizes Bond Buying at Smaller Banks as Market Soars
- Regulators sent survey to rural banks on bond investments
- The move comes as China bond market shows signs of overheating
The central bank said it’s a routine research with the purpose of guiding banks to focus on rural areas and small enterprises to better serve the real economy.
Photographer: Qilai Shen/BloombergChinese regulators are scrutinizing regional banks’ bond investments amid concern that they are speculating on the securities rather than lending to boost the economy, according to people familiar with the matter.
Policymakers this week requested information from rural lenders including their bond-trading activities over the past three years, their major counterparties and the necessity of the investments, the people said, asking not to be named discussing private matters. The regulators have asked banks to explain how they’ll focus on their key business of supporting small companies, the people added.