'A Game of Cat and Mouse' Between Regulators and Banks

At a time when banks are selling loans to trust companies on a massive scale, the China Banking Regulatory Commission (CBRC) issued two notices to put a ban on the practice.

On December 23, 2009, an urgent notice was sent out to banks nationwide prohibiting the widespread practice of banks "selling loans" to circumvent credit scale controls and capital adequacy ratio (CAR) requirements. The notice also demanded that banks guarantee the authenticity of credit asset transfers.