China names 10 banks assisting illegal capital flows

BEIJING China's foreign exchange regulators named 10 banks that had assisted illegal capital flows, vowing to crack down on fake forex transactions in the latest effort to stabilize the sliding yuan.

The State Administration of Foreign Exchange SAFE listed 10 typical cases of misdeeds in a statement on its website on Thursday, which included money flowing overseas illegally through bank businesses such as offshore loans, trade finance, and outbound investment.

Between 2017 and 2020, the misconduct involved local branches of 10 lenders that included some of the country's top banks.

SAFE will strengthen the oversight of the forex market and crack down on illegal and unlawful behaviour with a focus on false and deceptive forex transactions. The 10 cases will be published to send a warning to market players, the official Shanghai Securities News said on Friday, citing an unnamed SAFE official.

China's central bank said on Wednesday that stabilising the foreign exchange market is the top priority and warned against one-way currency bets. The yuan has fallen against a surging dollar over the past month.

Sources told Reuters that the People's Bank of China has asked major state-owned banks to be prepared to sell dollars in offshore markets.

The Shanghai Securities News reported on Friday that the SAFE will strengthen oversight of cross-border trade and investment against illegal forex transactions to safeguard national economic and financial security.

The newspaper said that regulators will monitor cross-border money flows and step up the fight against fraudulent trade.