China's central bank unveils a draft of a mechanism arrangement for trading of matured defaulted bonds to consult public opinion on the document. (Photo: IC)

BEIJING - China mulls trading of matured defaulted bonds in its latest move to guard against financial risks and benefit the real economy.

China's central bank Friday unveiled a draft of a mechanism arrangement for trading of matured defaulted bonds to consult public opinion on the document by July 13.

The draft document specifies the process and requirements of such trading, as well as risk control measures and obligations of related intermediary agencies.

The People's Bank of China has been piloting such practices in the inter-bank bond market organizations since the second half of 2018, which are running smoothly.

The mechanism is expected to improve treatment efficiency of defaulted bonds, facilitate market clearing and help guard against financial risks.

The final official document will be released after improvement of the draft based on public consultation.