Regulators in China are calling for greater risk management safeguards in new business lines, such as derivatives amid skyrocketing interest for the instruments. Liu Mingkang, chairman of the China Banking Regulatory Commission in Beijing, issued a statement in the local media noting banks must safeguard against credit, operational and market risk in innovative businesses, which is widely interpreted as derivatives, such as deposit-linked structures. Liu did not respond to messages.
A Chinese regulator said, "Embedded fx-linked option products have become a huge market in the last few months. The statement shows there needs to be a greater emphasis on risk management as this takes off
