Some banks in China have transferred loans off their balance sheets in an effort to circumvent regulatory requirements and capital and loan-loss provisioning, the China Banking Regulatory Commission (CBRC) said Tuesday.
Banks have been issuing wealth management products backed by credit assets, the CBRC said in its annual report posted on its website today.
Banks still assume the risks related to loan management and recovery even though the loans are not booked on their balance sheets, the report said. Consequently, the rising risks associated with banks' activities in transferring their on-balance-sheet exposures off the balance sheet need close supervision, the regulator said.>
