Chinese banks allowed to trade gold futures 2008-03-24 23:51:57
BEIJING, March 24 (Xinhua) -- Chinese commercial
banks will be allowed to trade gold futures in the domestic
market, according to a notice released on the regulator's
official website here on Monday.
China gold futures trading was launched in
January, but domestic banks were barred from trading by the
China Banking Regulatory Commission.
According to the notice, domestic banks that
meet certain requirements, such as having capital adequacy
ratio of more than 8percent, can apply for a trading permit.
"That's great news for the gold futures
market, which is not operating that well," said Hu Yuyue,
an expert with Beijing Technology and Business University.
"Commercial banks can provide more liquidity
and stability to the market, after all, they hold huge capital,"
said Hu.
"Gold futures trading can also help
domestic banks to improve competitiveness against overseas
banks as financial derivatives are supposed to be the largest
revenue sources for leading banks," he said.
Non-interest income usually accounts for
at least 50 percent of bank revenues in developed countries
and the proportion can reach 80 percent for some banks.
However, Chinese banks depend heavily on
the margins between deposits and loans.