OREANDA-NEWS. December 30, 2013. On July 2, the PBC issued Announcement No. 8 requiring that all inter-bank bond transactions shall be carried out via the system provided by the National Interbank Funding Center and shall not be revoked or changed after the transaction is completed so as to further regulate trading and clearing behavior on the inter-bank market.

On July 9, the PBC issued the Notice on Simplifying the Procedures for Cross-border RMB Business and Improving the Relevant Policies (PBC Document No.168 [2013]), which simplified the cross-border RMB business procedures under the current account, streamlined the cross-border clearing business of RMB bank-card accounts, and standardized the overseas RMB loan business by domestic non-financial institutions, the issuance of RMB-denominated bonds in overseas markets, and so forth.

On July 15, the PBC reported to the Finance and Economy Committee of the National People’s Congress on implementation of monetary policy during the first half of 2013.

On July 20, the PBC decided to remove controls over interest rates on loans offered by financial institutions. First, the lending-rate floor, which was 70 percent of the benchmark lending rates, was removed. Financial institutions will now independently determine their lending rates based on commercial principles. Second, controls over the interest rates of bill discounts were removed. Instead of adding a certain amount of basis points to the central bank discount rate, the financial institutions will price bill discounts independently. Third, the lending-rate ceiling for rural credit cooperatives was removed. Fourth, to strictly implement the differentiated housing mortgage policy and to promote the sound development of the real-estate market, the band for home mortgage loan rates was not adjusted.

On August 2, the China Monetary Policy Report for Q2 2013 was released.

On August 15, the State Council, in the form of State Council Reply Letter (No.91 [2013]), approved the establishment of a Joint-ministerial Financial Regulatory Coordination Mechanism, with the PBC as the leading institution and with participation by the CBRC, the CSRC, the CIRC, and the SAFE.

On August 26, to improve financial services for poverty reduction and development in large poverty-stricken areas, the General Administration Office of the PBC issued the Notice on Setting Up the Financial Services Coordination Mechanism for Large Contiguous Poverty-stricken Areas (PBC General Administration Office Document No.186 [2013]), which requires relevant PBC branch offices to set up a financial services coordination mechanism in 14 contiguous poverty-stricken areas. In addition, PBC branch offices should take measures according to local circumstances and actively carry out financial services innovation, information sharing, policy publicity, statistical analysis, and so forth.

On August 27, to prevent market risks, improve market efficiency, and promote the sound development of the inter-bank bond market, the PBC issued Public Announcement No.12 to strengthen the clearing requirements for Delivery Versus Payment (DVP) on the inter-bank bond market.

On August 28, the Executive Meeting of the State Council required that efforts should be made to gradually but steadily expand the pilot program of credit asset securitization on the basis of strict risk controls. According to the decisions made at the meeting, the PBC will work together with other relevant departments to implement the plan.

On September 9, the PBC signed a bilateral local currency swap agreement with the Magyar Nemzeti Bank (Hungarian National Bank). The size of the swap facility was 10 billion yuan/375 billion Hungarian forint. The agreement is valid for three years and can be extended upon mutual consent.

On September 11, the PBC and the Central Bank of Iceland renewed their local currency swap agreement. The size of the swap facility is 3.5 billion yuan/66 billion ISK. The agreement is valid for three years and can be extended upon mutual consent.

On September 12, the PBC signed a bilateral local currency swap agreement with the Bank of Albania. The size of the swap facility is 2 billion yuan/35.8 billion lek. The agreement is valid for three years and can be extended upon mutual consent.

On September 23, the PBC issued the Notice on Issues Concerning the RMB Settlement Business of Investments in Domestic Financial Institutions by Overseas Investors (PBC Document No. 225[2013]) to standardize the use of the RMB settlement business by overseas investors for their investments for the establishment, merger and acquisition, and holding of equity in Chinese financial institutions.

On September 24, the inaugural and first regular meeting of the self-regulatory market interest-rate pricing mechanism was convened in Beijing. The self-regulatory pricing mechanism for market interest rates, as a market self-regulatory and coordination mechanism among financial institutions, aims to apply self-regulatory management over interest rates that are independently determined by financial institutions in the money, credit, and other financial markets, under the precondition of complying with the relevant interest-rate regulations, so as to maintain market order for fair competition and to promote the healthy development of the financial market. The meeting deliberated on and passed the Guidelines for the Self-regulatory Pricing Mechanism of the Market-based Interest Rates and the Rules for the Loan Prime Rate (LPR) Centralized Quotation and Release Mechanism, and elected the first chairman of the mechanism.

On September 27, the Monetary Policy Committee of the PBC convened its third regular quarterly meeting in 2013.