China’s caution on compression stretches global banks’ risk limits

Try as they might, global lenders cannot coax their Chinese bank counterparties to compress the large books of renminbi swaps they’ve racked up between them in recent years. At a time when Chinese corporates are bingeing on dollar debt, fuelling demand for currency swaps, that leaves foreign dealers with a large and increasingly costly headache.

“For currency swaps, we are already finding it