China’s banking regulator is again warning concerning the financial perils of an overheated property market, this period flagging risks from off-balance-sheet credit channels.
The China Banking Regulatory Commission desires to restrict credit for the property sector by strengthening the supervision of 民間二胎 and banks’ wealth-management products, as outlined by a statement posted on its website Saturday.
China should “strengthen risk control comprehensively, to hold fast the bottom line on the appearance of systemic financial risk,” the statement said.
A flood of credit has entered China’s property market this year, driving up prices in main coastal cities such as Shanghai, plus some smaller, less-affluent cities.
As fears grow regarding a property bubble, local governments recently imposed new restrictions built to tighten banks’ home-lending standards.
Meanwhile, financial regulators are already seeking to curb risky practices by banks, some of which have offered credit lines to borrowers with few questions asked and dealt with brokers and developers to assist buyers develop down payments.
The banking regulator considered your property market at a meeting Friday to analyze the state China’s economy and financial system through the third quarter.
In its statement pursuing the meeting, the regulator said it could be more strict on property loans, have a careful approach in the creation of property-related businesses and prohibit funds from flowing to the sector illegally.
The regulator has recently said the rapid increase in property loans posed ” new challenges” for China’s government, but is already acknowledging the influence of funds from the shadow-banking industry on the real-estate sector.
While mortgages constitute most of the funds gonna property, about 30% of credit for the sector originates from non-bank sources, including trusts, wealth-management products and dexlpky83 channels. Real estate took up 8.5% of credit issued by trusts throughout the second quarter this coming year, based on latest data from your China Trustee Association, a government-backed industry group.
Many economists expect Beijing to introduce further tightening measures.
In the week, the Shanghai branch of your People’s Bank of China warned executives from more than two dozen 房屋二胎 about risks in the real-estate sector, calling to them to strictly comply with rules limiting credit.
Some brokerages and analysts believe authorities have intends to tighten credit via the capital market. Chinese media speculated in recent days that property firms will see it harder to issue bonds.