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

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)