PRC firm Fangda Partners has poached a four-member capital markets team from Shearman & Sterling in Hong Kong led by Colin Law, who headed that practice for Asia at his previous firm.

The China Securities Regulatory Commission (CSRC) has banned the use of over-the-counter (OTC) derivatives as a financing channel, in a fresh move to restrict risky shadow banking businesses, according to a CSRC notice obtained by Reuters, and confirmed by two sources.

China has uncovered over 1 trillion yuan (120.35 billion pounds) worth of illegal transactions by underground banks this year, the official Financial News reported on Thursday, citing a senior official at the foreign exchange regulator.

Shadow lending by listed Chinese banks surged in the first half, underlining the challenges faced by the country's banking regulator as it tries to rein in the use of opaque lending structures that are seen as a threat to financial stability.

Chinese private investment funds will conduct a "self-inspection" of their business practices in compliance with a directive from the State Council, China's cabinet, according to a notice posted on the website of the Asset Management Association of China.

Hit by bad loans, Chinese banks are expected to show a weakening in their capital strength in first-half earnings, raising the prospect that government might have to inject more than $100 billion to shore them up, according to some analysts.

China's five biggest banks reported sharply rising bad loans for the third quarter as the economy slows, with one adding that a credit crunch squeezing small companies in the country's export-oriented eastern provinces may be spreading westwards.

中国招商银行 金融市场部最新报告认为，从国内外宏观经济环境而言，信用环境最糟糕的时刻尚未到来，未来将继续趋势性收紧，非政府类债务将成为“雷区”，明年有可能进入“踩雷”高发期。

China will open up its market for clearing domestic bank card transactions, the cabinet said on Wednesday, in a move that could benefit companies such as Visa Inc and Mastercard, in a booming market worth more than $1 trillion a year.

尽管今年中国在亚洲和欧洲金融中心快速铺开使用人民币，但银行家已在期盼把加拿大和中东当作离岸人民币业务接下来的增长地区。