The Bank of China (BOC) has become a shareholder of CLS Group, provider of a global banking settlement system for the foreign exchange market, announced spokesman of the BOC on Tuesday.

 

BOC is the first Chinese bank member and the 69th of CLS shareholder group, which mainly consists of large international commercial banks and investment banks.

 

According to Wang Zhaowen, the spokesman of the BOC, by becoming a shareholder of the CLS Group and using Continuous Linked Settlement system provided by the CLS Bank International, BOC will greatly enhance its management over settlement risks.

 

CLS Bank links 15 central banks in the world and many of the world's leading financial institutions. Currently a total of 57 member banks are settling payment instructions associated with foreign exchange trades through CLS Bank, with over 750 customers in total.

 

Bank of China (Hong Kong) Limited will in due course apply to become a settlement member of CLS Bank, said Wang.

 

China is a very important part of the global economy and will see significant growth in its financial sector in the coming years. CLS will provide BOC, CLS's first Chinese shareholder, with the same risk, liquidity and efficiency benefits that the other shareholders are experiencing, said Rob Close, Chief Executive Officer of CLS Group and President and CEO of CLS Bank.

 

Li Lihui, President of BOC, said that as a leading foreign exchange bank of China, BOC could better manage settlement risk in the foreign exchange market and improve fund use efficiency after joining CLS and using CLS settlement model, thereby further enhancing the risk management and liquidity management of BOC.

 

As one of China's four leading commercial banks, BOC was listed on the Hong Kong Stock Exchange on June 1 this year and on the Shanghai Stock Exchange on July 5, thus making it China's first commercial bank listed in both the international and domestic capital markets.

 

(Xinhua News Agency October 11, 2006)