Money

Banks get go-ahead to sell loans on interbank market

(Agencies)
Updated: 2010-09-26 09:07
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China has allowed banks to sell loans on the interbank market and 21 banks already agreed to start transactions, Bloomberg reported Saturday.

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Bloomberg said that the banks include Industrial & Commercial Bank of China Ltd, HSBC Holdings Plc and China Construction Bank Corp.

As a new product in China's interbank market, the "loan transfer" plan will improve banks' risk-management ability and help with the central bank' macro control, Zhou Xiaochuan, governor of the People's Bank of China, the country's central bank, was quoted by the report as saying.

The start of a "loan transfer" market will improve liquidity of loan assets at banks and the pricing mechanism of credits. It will also allow the market to better set interest rates, said ICBC Chairman Jiang Jianqing, according to Bloomberg.