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The Chinese banking regulator will......>

CHINA PRESS
CHINA PRESS: The Chinese banking regulator will further suppress the growth of
interbank asset transactions while encouraging an expansion of banks' lending
businesses, the Financial News, the journal run by the People's Bank of China,
reported Monday. According to a draft released last Wednesday by the China
Banking Regulatory Commission to solicit public opinion, the supervision of
banks' liquidity situations will be strengthened. Small and medium-sized banks
have generated a large liquidity risk as half of their liabilities are funding
raised through wholesale interbank transactions, a risk worsened by high
leverage ratios and mismatched durations, the report said. The draft will set
quotas for interbank wholesale funding of different durations, which will
restrain the mismatches, the report noted. Long-term liabilities will increase
as banks focus on curbing short-term interbank transactions to meet the
regulatory requirements. (Financial News)

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