Regulatory Concern Grows along with Surge in Interbank Business

In less than three years, the interbank business has expanded rapidly in China, creating huge off-balance-sheet assets that are starting to worry regulators.

By the end of the first quarter of 2013, interbank assets in listed Chinese banks reached a total of 11.6 trillion yuan, accounting for nearly 13 percent of their total assets. In 2006, the figure was 1.6 trillion yuan. Banks use these assets to bypass lending quotas and capital restraints, and some small banks rely on the market for funding, too.