CBRC: Will not allow Chinese banks to trade treasury futures in the near term

In response to a proposal from China's People's Political Consultative Conference, which called for commercial banks to be allowed to trade treasury futures as soon as possible, the China Banking Regulator Commission (CBRC) said that it will not allow Chinese banks to trade treasury futures in the near term, following discussions with other government ministries, MNI reports.

Key Quotes:

“The banking regulator said treasury futures uses high leverage ratios, which can amplify market volatility in extreme condition.”

“The CBRC noted increasing bond defaults in the domestic market, with greater volatility in the futures market and that government regulators are working on tightening supervision”