CHINA WILL ALLOW INSURERS TO BUY ASSET-BACKED SECURITIES

Insurers in China are to be allowed to invest in asset-based securities sold by banks, some 60bn yuan of which are to be sold within the coming year. The securities, bonds backed by mortgage loans and credit card receivables, became permissible financial instruments in April last year. Speaking today at a conference in Beijing, China Banking Regulatory Commission product director Li Fuan said that “the regulator will push to broaden the use of securitisation and end the pilot programme as soon as possible”. China’s government wants to develop the asset-backed securities market so that the country’s banks rely less on loans.