Bank of China kicked off its settlement process this week with the proposal to cover up to 20 percent of the initial investments of some clients.
Following discussions with regulators, Bank of China has agreed to return up to 20 percent of initial investments to some clients which totaled losses of over $1 billion.
According to the Financial Stability and Development Committee (FSDC), Bank of China has no legal obligation to return despots although it had indeed failed to follow investment suitability principles, The FDSC instructed the state-owned bank to return 20 percent of deposits to clients who invested less than 10 million yuan ($1.4 million).
Investor Rage
After the collapse of the now infamous «Crude Oil Treasure» product, widespread investor rage unraveled and some have even taken legal means to engage the bank on claims that the distribution of the product which allowed losses beyond the initial amount was deemed non-compliant.
Elsewhere, risk controls were also tightened as commercial banks halted the sales of wealth management products that could potentially lead to unlimited losses in an effort to prevent systemic failure.
