Interbank transactions should serve.....>

CHINA PRESS: Interbank transactions should serve banks' liquidity management and

not be a tool for speculative arbitrage, the Economic Information Daily said in

the front page commentary on Wednesday. Financial institutions should be careful

to avoid excessive reliance on wholesale funding, the commentary noted. Bonds

and non-standard assets supported by wholesale funding rely heavily on adequate

financial market liquidity, so any disruption of access to wholesale funding for

some institutions could easily trigger a risk for the market as a whole, the

commentary warned. Regulators should establish relevant rules in a timely manner

to curb the irrational interbank arbitrage, the commentary argued. (Economic

Information Daily)