China blocks investment linked to commodities to prevent a potentially hazardous rally

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Regulators in China have instructed banks not to sell investments linked to Commodity Futures to consumers. This was reported by Reuters news agency on Wednesday, based on sources.

In doing so, regulators want to prevent consumers from suffering significant losses due to volatile commodity prices. China even wants banks to clean up their current order books to directly reduce private exposure to Commodity Futures.

“The risks associated with these investments are incalculable and cannot be borne by ordinary investors,” said one of the sources to Reuters. “Moreover, banks do not have the expertise to offer such products,” Reuters quoted.

China has long been concerned about rising commodity prices and is trying to curb them by verbal intervention.

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Nicholas de Kramer

Nicholas de Krammer, а self-taught economic analytic with heave mathematical background. Math behind the economics (and economics behind math) is the strong side of the author. Contact him at [email protected]

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