China bank stops FX swaps, forwards with some European banks -sources

BEIJING, Sept 20 Mon Sep 19, 2011 10:07pm EDT

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BEIJING, Sept 20 (Reuters) - A big market-making state bank in China's onshore foreign exchange market has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe, two sources told Reuters on Tuesday.

The European banks include French lenders Societe Generale , Credit Agricole and BNP Paribas .

"Apart from spot trading, all swaps and forwards trading (with the European banks) have been stopped," one source who is familiar with the matter told Reuters.

The Chinese state bank, a primary player in China's onshore foreign exchange market, has also stopped trading with UBS AG in the wake of that bank's $2.3 billion loss from a rogue trading scandal. (Reporting by China news team; Editing by Ken Wills)

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