China Bans Risky Trusts From Selling Wealth Products for LGFVs
- NFRA told firms to stop raising money from individuals: people
- Move can add to stress at LGFVs already struggling for funding
This article is for subscribers only.
China told some trust companies to stop raising money from individuals to fund local government financing vehicles, according to people familiar with the matter, in its latest effort to curb growing financial risks.
The National Financial Regulatory Administration recently banned some lower-rated trust firms from selling wealth products underpinned by LGFVs on concerns of potential defaults, the people said, asking not to be identified as the guidance was private. It’s unclear how many of China’s 67 trust firms received below-par ratings in the watchdog’s latest assessment, the people added.