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CHINA PRESS: Swap Facility To Increase Stock Market Resilience

CHINA PRESS
EM BulletAPACChinaEmerging Market NewsBulletGlobalFixed Income BulletsForeign Exchange BulletsRegionMarkets

The People's Bank of China's recently launched CNY500 billion Securities, Funds and Insurance Companies Swap Facility (SFISF) will enhance the resilience of the capital market and curb pro-cyclical behaviours such as the "herd effect", China Securities Journal reported citing analysts. The tool allowing financial institutions to swap their bonds and stocks with high-liquid treasuries and central bank bills to invest in the stock market, will not increase base money supply, and is expected to be expanded in terms of scale and scope of collateral, the newspaper said citing analysts. The central bank will conduct operations through selected primary dealers, which may include China Bond Insurance Co, the Journal said citing an unnamed source.

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The People's Bank of China's recently launched CNY500 billion Securities, Funds and Insurance Companies Swap Facility (SFISF) will enhance the resilience of the capital market and curb pro-cyclical behaviours such as the "herd effect", China Securities Journal reported citing analysts. The tool allowing financial institutions to swap their bonds and stocks with high-liquid treasuries and central bank bills to invest in the stock market, will not increase base money supply, and is expected to be expanded in terms of scale and scope of collateral, the newspaper said citing analysts. The central bank will conduct operations through selected primary dealers, which may include China Bond Insurance Co, the Journal said citing an unnamed source.