Banking News
- Banks to invest clients' money in U.S. stocks
Date: 17-Dec-2007 Sources: (Shenzhen Daily)
CHINA and the United States had reached an agreement to allow Chinese banks to invest clients' money in U.S. markets, an official with China's banking regulator said.
The in-principle agreement represents a significant expansion of China's Qualified Domestic Institutional Investor (QDII) program, which permits overseas investment by mainland institutions, and until now has been limited mainly to investments in Hong Kong.
The agreement was reached during the two-day third Strategic Economic Dialogue with the United States held last week outside Beijing, Li Fuan, head of the China Banking Regulatory Commission's innovation supervision coordination department, said Friday.
The deal would give Chinese people 'more investment choices, greater opportunity to diversify risk, and more channels to participate in international financial markets,'Li said.
Li didn't give a specific timetable for implementation of the QDII expansion, only saying that it would happen 'very quickly.'
The QDII program, initiated last year, allows mainland banks, fund managers and insurers to invest in securities abroad up to set quota amounts. The program is viewed as a key method for China to let capital flow out of its borders, hence addressing its large balance-of-payments surpluses and the resulting influx of liquidity.
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