China enhances regulation of interbank business

China's financial regulators on Friday issued rules to enhance and improve regulation of interbank business to contain financial risks and direct more capital into the real economy. The 18 rules were jointly formulated and issued by the People's Bank of China (PBOC), the central bank, and the country's top banking, securities, insurance and foreign exchanges regulators. Innovation and rapid growth in interbank businesses have played an important role in facilitating liquidity management, improving financial resources allocation and supporting the real economy, according to a central bank statement. However, some of the interbank businesses should have been better regulated, there has been weak information disclosure and some of the businesses intended to evade financial regulation, it said. The rules cover lending, deposits, payments and other financing transactions between banks and other financial institutions. Under the new rules, there would be stricter accounting standards and risk control measures for interbank businesses. The central bank said the improved regulation would help build a sound financial market order, promote the healthy development of interbank business, effectively contain financial risks, and guide more capital into the real economy.