PBOC Sets Up Bond Market NBFI Large Redemption Swap Facility

36Kr learned that, to further implement the requirement to "build a scientific and stable monetary policy framework and a comprehensive macroprudential management system," and to maintain bond market stability, the People's Bank of China has decided to establish the Bond Market NBFI Swap Facility (BNSF) for large-scale redemptions. Under specific circumstances where asset management institutions face collective liquidity risks and the bond market experiences systemic pressure, the facility supports wealth management subsidiaries of banks and public fund managers with systemic impact (or their parent banks, securities parent companies, etc.) in borrowing central bank bills from the PBOC for market repo financing. The funds are used to buy eligible bonds or fund shares of public products redeemed from their own company (or asset management subsidiaries), and these are pledged to the PBOC. Participating institutions should continuously meet prudential financial market management requirements and uphold market discipline.