China's cabinet has published guidelines strengthening regulation of risky off-balance-sheet lending in a new effort to address growing financial risks from an explosion in debt.
The State Council's guidelines call for tighter regulation of banks' off-balance-sheet lending and say that trust companies—the biggest non-bank players in what's called "shadow banking"—should return to their original purpose as asset managers and not engage in "credit-type" business.
A copy of the council's Document 107, dated December 11, was obtained by Reuters. There's been no official confirmation of the document, which was addressed to government agencies at the central and local level.
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