Beijing Opens Mainland’s Interbank Bond Market to Foreign Financials(Currency Wars=Shooting Wars!)
SputnikNews.com
14.07.2015
To spur the faltering economy, mainland China is moving to open its bond market, considering debt-fueled growth a proper scenario out of the current glut.
Kristian Rouz — In an attempt to improve the financial situation in investment-starved mainland China, the Communist nation’s regulators took another step towards greater economic openness by allowing foreign central banks, wealth funds and international financial organizations to participate in the mainland’s national interbank bond market.
The move, effectively exposing a significant part of the mainland’s financial architecture before the foreigners, is designed to attract international capital to the Chinese market, suffering from insufficient monetary liquidity.
As provided by the recent regulation announced Tuesday, the aforementioned foreign, international and global financial institutions will no longer be required to negotiate a preliminary administrative approval to buy and sell fixed income securities (bonds), trade interest rate swaps and conclude repurchase deals. Beijing consciously withdrew from these sorts of financial market operations, hoping less administrative involvement would attract more money into the system.
However, the parties involved in these operations, will still be required to fill out certain deal registration forms, as a measure of account and prevention of corruption, which is rife in China.
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