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CBRC denies stock probes

(Shenzhen Daily)
Updated: 2007-03-08 15:13

The country's top banking regulator has denied his agency had launched special investigations of possible illegal bank loans flowing into the country's stock market, as had been widely reported, State media said yesterday.

Fears about a possible official clampdown on stock trading, including reported probes by the China Banking Regulatory Commission (CBRC) into the inflow of bank loans into the market, were cited as a key factor behind the sharp fall in domestic share prices over the past week.

"CBRC has not specifically launched any investigations related to the stock market," said CBRC chairman Liu Mingkang.

"Nor is it taking any special measures targeting the stock market," Liu was quoted as saying on the sidelines of the China's annual parliamentary session, which kicked off in Beijing on Monday.

Liu said CBRC, in its regular checks of credit risks, had found some irregularities by some institutions and individuals to divert bank loans for other purposes into the stock market.

Some earlier local media reports had said CBRC had launched special investigations into possible illegal diversions of bank loans into the stock market.

China's benchmark stock index, the Shanghai composite index, has dropped 8.7 percent from an all-time intraday peak of 3,049.771 points hit last Tuesday. Its volatile trade last week, including an 8.8 percent tumble by the close Tuesday last week, helped rattle global markets.

On Monday, Chinese shares tumbled in line with a 4-percent drop in Hong Kong and declines in other regional markets, but by the close they had recovered some of their intraday losses, boosted by officials' comments at the parliamentary session.