China Hits Banks over ‘Hot Money’: FT
Ten international banks, including HSBC and Standard Chartered, have been punished by China’s foreign exchange regulator for breaching strict capital controls, the FT reported.
The banks had been helping to funnel huge amounts of foreign exchange into the country’s soaring stock and property markets.
The report said other institutions included Citibank, Bank of East Asia and branches of China’s “big five” state-owned commercial banks – China Construction Bank, Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China and Bank of Communications.
The State Administration of Foreign Exchange on Tuesday announced 29 banks – 19 of them domestic – had received unspecified punishment for “assisting speculative foreign capital to enter the country disguised as trade or investment”, the article added.
The administration's deputy director, Deng Xianhong said in a statement that the money these banks helped to channel had a "serious effect on healthy economic development and government efforts to control growth”.
The FT said none of the Chinese banks reprimanded would comment but Standard Chartered and HSBC acknowledged they had been inspected by SAFE.