Interbank bond market review expected

"It depends on whether the cases relate to illegal transactions and corruption," Yang said.

Corruption occurs when some financial institutions preferentially purchase "hot" bonds from issuers or underwriters, he said.

Some commercial banks sell their bonds to other financial institutions in order to transfer the bond investment risk off its balance sheet temporarily to another party for a fee, and buy back bonds after the accounts are examined.

Another way is that commercial banks can buy bonds from non-financial institutions, in return for higher fund lending rates, which adds leverage.

The two parties agreeing to share profits is considered insider trading, as it can influence bond prices.

An executive manager of fixed-income investments at a major foreign bank said: "Bank investment using capital collected from selling their own wealth management products is actually a separate case with much lower risk.

"Only very few lenders participated in illegal 'cooperation' with non-financial institutions."

In an annual report released on Wednesday, the CBRC said this year it will prioritize the supervision of wealth management products and investments using capital collected from selling such products.

"We will hold firmly to the bottom line of no systemic and regional risks," it said, vowing to prevent risks from off-balance sheet businesses spreading to the core assets of banks.