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China’s financial market watchdog has accused four state-backed rural banks in Jiangsu province of manipulating market prices and transferring benefits in the secondary market for government bonds.
The action comes as part of the central bank’s broader efforts to cool down a bond market rally amidst an economic slowdown.
The National Association of Financial Market Institutional Investors (NAFMII), an affiliate of the People’s Bank of China, announced the initiation of a self-disciplinary investigation into the four rural commercial banks: Jiangsu Changshu Rural Commercial Bank, Jiangsu Jiangnan Rural Commercial Bank, Jiangsu Kunshan Rural Commercial Bank, and Jiangsu Suzhou Rural Commercial Bank.
On Wednesday, a financial market association under China’s central bank said it will investigate four rural commercial banks over suspected manipulation in the treasuries market, as Beijing steps up efforts to cool a sizzling bond rally.
The National Association of Financial Market Institutional Investors had said in a statement the banks - all based in eastern Jiangsu province - “were suspected of manipulating prices and transferring benefits in the secondary market trading of treasury bonds”.