Market reports said some provinces told small and medium-sized banks to keep
financial-investment growth no faster than loan growth and to limit new-bond
duration to no longer than existing holdings. People familiar with the matter
said Chinese regulators have not issued a nationwide mandate; bond purchases and
duration choices remain within banks’ asset-liability management discretion,
though institutional constraints apply. Another source said interest-rate risk
levels and risk management are subject to explicit rules and local supervisors
carry out routine risk monitoring and reminders for institutions in their
jurisdictions.
