SHANGHAI, Dec 26 (Reuters) - A Chinese government agency responsible for financial stability said it is seeking to help commercial banks replenish capital via various channels, with the aim of allowing them to issue perpetual bonds as soon as possible.
The Financial Stability and Development Committee under the State Council held a meeting to discuss the issue on Tuesday, the agency said in a statement posted on the website of the People’s Bank of China on Wednesday.
Many Chinese banks need to replenish capital to meet increasingly stringent capital rules as they face growing pressure to write off bad loans and heed government calls to aid a struggling economy amid a prolonged Sino-U.S. trade war.
But Chinese lenders face limited funding channels as many listed banks trade below their book value in a bearish stock market.
A perpetual bond is a fixed income security with no maturity date, and the principal will not be repaid. (Reporting by Samuel Shen and Adam Jourdan Editing by Shri Navaratnam)
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