July 8, 2019 / 8:44 AM / 12 days ago

China central bank suspends some traders at Ping An Bank and China Merchants Bank

FILE PHOTO: The names of Ping An Bank are displayed outside a branch in Shenzhen, China November 12, 2016. REUTERS/Bobby Yip

SHANGHAI (Reuters) - China’s central bank said on Monday it has suspended some traders at Ping An Bank and China Merchants Bank for a year for involvement in “abnormal” trades.

The People’s Bank of China (PBOC) has required the two lenders to strengthen risk controls and internal management following their involvement in such interbank trades on July 2, it said in a statement.

The two lenders were involved in overnight bond repo trades CN1DRP=CFXS in the interbank market that put the price at 0.09% on July 2, the PBOC said.

On Monday morning, the overnight repo rate traded at 1.43%.

China Merchants Bank (600036.SS), in a statement to Reuters on Monday afternoon, said that the mistakes in relevant transactions “had gone through friendly negotiations and were corrected based on normal market rates” with its counterparty.

The lender added that it had suspended relevant traders’ qualifications based on the central bank’s requirements. The bank will “resolutely prevent such risk events from happening again,” according to its statement.

Ping An Bank (000001.SZ) did not immediately reply to a request for comment.

Reporting by Li Zheng, Andrew Galbraith and Winni Zhou in SHANGHAI, Zhang Shu in SINGAPORE; Editing by Richard Borsuk

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