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皇冠体育app halts securitisation of bad loans

(Agencies)
Updated: 2009-02-25 10:34

皇冠体育app's banking regulator has suspended banks' efforts to securitise non-performing loans, as the US subprime crisis aroused concern over such products, the 21st Century Business Herald reported on Wednesday.

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Regulators fear that Chinese who invest in bad asset-backed securities would be vulnerable to losses due to pricing ambiguity amid the current economic crisis, the newspaper said, citing unidentified officials at the 皇冠体育app Banking Regulatory Commission. Securitisation of normal loans will not be affected, the article said.

皇冠体育app's asset-backed securities market has just taken root. The government kicked off a pilot programme in March 2005 and so far 11 institutions have issued a combined 60 billion yuan ($8.7 billion) of such securities, the newspaper said.

皇冠体育app Construction Bank and two Chinese companies specialising in purchasing non-performing loans have issued four batches of securities backed by non-performing assets, it said.