BEIJING, Jan. 15 (Xinhua) – China has succeeded in clearing incompatible wealth management products (WMPs), a senior regulatory official said on Saturday, announcing a period of persecution that has lasted “several years” in the sector. while doing. complete “.
Here, WMPs are investment instruments sold by issuers, including banks and property developers, to retail and corporate investors, often yielding much higher returns than deposits. They became famous because China’s largest indebted manufacturers were facing a financial crisis.
Cao Yu, vice chairman of China’s Banking and Insurance Regulatory Commission, said at a forum in Beijing that short-term products and products with basic guarantees that do not meet wealth management requirements will be eliminated by the end of 2021. he said.
He said most banks, particularly small and medium-sized banks, adjusted their WMP reserves according to schedule.
According to Cao, financially reliable products make up a steadily declining portion of WMPs, non-compliant trusted products are used by some companies for financing, and more than 80%.
Chinese regulators have set comprehensive rules for the asset management sector to curb banking asset management products in 2018, which is part of a broader framework to limit large and often uncertain financial risks.
Interviews by Rong Ma in Beijing and Andrew Galbraith in Shanghai; Edited by William Mallard