23.4 C
New York
Wednesday, July 6, 2022

China cuts banks’ risk weightings for debt-for-equity swaps: sources

China cuts banks' risk weightings for debt-for-equity swaps: sourcesChina cuts banks’ risk weightings for debt-for-equity swaps: sources

BEIJING (Reuters) – China’s financial sector regulator has lowered risk weighting requirements for debt-for-equity swaps to push commercial banks to accelerate the pace of resolving mounting corporate debts, three people with knowledge of the matter said on Thursday.

Stakes in listed companies’ will have a weighting of 250 percent when banks calculate risk-weighted assets, while stakes in unlisted companies will carry a weighting of 400 percent, the sources said, citing an internal notice of the China Banking and Insurance Regulatory Commission.

The regulator did not immediately respond to a request seeking comment.

Compared with previous regulations that have banks’ risk weightings at 1,250 percent for equity investments in commercial entities and at 400 percent for policy-directed equity stakes, the new rules reduce capital required for lenders to conduct debt-for-equity swaps.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles