AFX News Limited China banking regulator drafting law to stop bank loans for stock speculation ,

BEIJING (XFN-ASIA) - The China Banking Regulatory Commission (CBRC) is drafting new regulations aiming to plug the loopholes through which bank loans are misappropriated for stock market speculation, the Economic Observer reported. Quoting unnamed sources familiar with the matter, the newspaper said the CBRC has formed a special panel that includes commercial banks’ representatives, to work on the draft, which already began two months ago.

The new regulation will cover supervision of the whole course of commercial banks’ loan issuing process, focusing on oversight of the movement of the loans upon their issue by the banks, according to the newspaper. The report said the CBRC’s move has been prompted by the fact that that loans from commercial banks are being used for speculation in the domestic stock markets.
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