Chinese financial regulators have advised major banks to limit their holdings of US Treasury securities, urging limits on new purchases and recommending that banks with high exposure reduce existing positions due to concerns about concentration risk and market volatility in US government debt markets. The guidance, reported by Bloomberg, is framed as a risk-management and diversification measure rather than a political statement on US creditworthiness. It does not apply to China’s official state Treasury holdings, and comes amid broader discussions about global reserve management and financial stability. Bloomberg reports:
Chinese regulators have advised financial institutions to rein in their holdings of US Treasuries, citing concerns over concentration risks and market volatility, according to people familiar with the matter. […]
Still, US Treasury Secretary Scott Bessent said last week that “despite the popular narrative,” the Treasuries market last year delivered its best performance since 2020 and saw record foreign demand at auctions. […]
Global markets have experienced sharp moves this year, with gold surging then seeing its biggest decline in four decades, Japan’s government bond market suffering a $41 billion meltdown and the dollar and yen fluctuating wildly.
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