Key facts
- The facility aims to provide liquidity directly to nonbank financial institutions.
- It is designed to curb forced selling during bond-market stress.
The People's Bank of China has launched a swap facility to provide liquidity directly to nonbank financial institutions facing heavy redemptions during periods of bond-market stress. The Bond Market NBFI Swap Facility (BNSF) adds to the central bank's macroprudential toolkit. It is designed to bypass commercial banks that may be reluctant to lend during market turmoil and curb cycles of forced selling that could pose systemic risks.