China regulator urges interbank liquidity support for smaller non-banks - sources

China's securities watchdog has told several large non-bank financial institutions to lend more to smaller non-bank institutions in the interbank market to ease a liquidity crunch, sources with direct knowledge of the matter told Reuters on Monday.

Corrects dateline

BEIJING, June 17 (Reuters) - China's securities watchdog has told several large non-bank financial institutions to lend more to smaller non-bank institutions in the interbank market to ease a liquidity crunch, sources with direct knowledge of the matter told Reuters on Monday.

Li Chao, vice chairman of China Securities Regulatory Commission (CSRC), delivered the message during a meeting on Sunday. According to the minutes, confirmed by the four sources, Li urged large non-bank institutions not to cut off smaller non-banks as counterparties in the interbank market.

Li also told them to increase their lending quota for short-term bonds and offer more financing tools to support small securities firms and funds, the minutes showed.

(Reporting by Cheng Leng, Samuel Shen, Xiaochong Zhang and Ryan Woo; Editing by Simon Cameron-Moore)

((cameron.moore@thomsonreuters.com; +65 680 3593; Reuters Messaging: cameron.moore.reuters.net@reuters.com))

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