PBOC warns anew against shadow banking

Says there is a need to strengthen disclosure.

The People's Bank of China, the central bank, warned of rising risks from bank wealth management products or WMPs that offer higher interest rates than traditional deposits.

Shadow banking is a term used to describe a wide range of services provided by the unofficial financial system and the conventional banking system.

PBOC also said more disclosure was needed in the shadow banking area and that measures were needed to ensure that off-balance sheet risks didn't spread.

It said there is a need for appropriately dealing with local government borrowing risks. Rules need to be tightened to prevent local governments from turning to the shadow banking system for loans.

Constraints are also needed to prevent the property sector from turning more to shadow banking.