The People's Bank of China has decided to establish the Bond Market NBFI Swap Facility (BNSF), allowing systemically significant bank wealth management subsidiaries and public fund managers, or their parent banks or securities companies, to borrow central bank bills for repo financing when asset managers face collective liquidity risks and the bond market faces systemic pressure, with funding used to purchase eligible bonds held by, or units in, their own or their asset management subsidiaries' publicly offered products facing redemptions and pledge the purchased assets to the central bank, subject to continued compliance with financial market prudential requirements and market discipline.
People's Bank of China announces swap facility for large nonbank redemptions during systemic bond market stress
The People's Bank of China will establish a facility enabling systemically significant bank wealth management subsidiaries and public fund managers, or their parent institutions, to borrow central bank bills for repo funding during systemic liquidity stress, financing purchases of eligible bonds or units associated with their publicly offered products facing redemptions and pledging the acquired assets to the central bank.