Bank of China cancels swaps trading with European lenders

20 September 2011

Bank of China has cancelled swaps trading with a number of European banks as a result of the debt crisis currently engulfing the continent, it has been claimed.

Reuters reports that three sources with knowledge on the matter revealed the lender has also stopped foreign exchange forwards for fears over the stability of the region.

The new agency noted claims of a second institute in China following suit indicate the country's banks are becoming the latest in a line of financial bodies attempting to reduce their exposure to Europe.

According to the insiders, the three French banks Credit Agricole, BNP Paribas and Societe Generale are among the lenders with whom Bank of China - which was formally established in 1912 and served as the nation's central bank until 1949 - has restricted trading.

A separate source told the news provider: "Apart from spot trading, all swaps and forwards trading [with the European banks] have been stopped."

By Claire Archer

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