China’s banking regulator is again warning concerning the financial perils of any overheated property market, this time around flagging risks from off-balance-sheet credit channels.
The China Banking Regulatory Commission wants to restrict credit on 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 carry fast the important thing on the appearance of systemic financial risk,” the statement said.
A flood of credit has entered China’s property market this coming year, driving up prices in leading coastal cities such as Shanghai, and some smaller, less-affluent cities.
As fears grow about a property bubble, local governments have recently imposed new restrictions made to tighten banks’ home-lending standards.
Meanwhile, financial regulators are already trying to curb risky practices by banks, many of which have offered credit lines to borrowers with few questions asked and worked with brokers and developers to aid buyers put together down payments.
The banking regulator looked at the property market at a meeting Friday to analyze the state of China’s economy and financial system throughout the third quarter.
Within its statement using the meeting, the regulator said it will be more strict on property loans, require a careful approach in the development of property-related businesses and prohibit funds from flowing to the sector illegally.
The regulator has now said the rapid surge in property loans posed ” new challenges” for China’s government, but is now acknowledging the influence of funds from the shadow-banking industry around the real-estate sector.
While mortgages form many of the funds gonna real-estate, about 30% of credit to the sector comes from non-bank sources, including trusts, wealth-management products and dexlpky83 channels. Real estate took up 8.5% of credit issued by trusts in the second quarter this year, as outlined by latest data from the China Trustee Association, a government-backed industry group.
Many economists expect Beijing introducing further tightening measures.
In the week, the Shanghai branch of the People’s Bank of China warned executives from more than two dozen 房屋二胎 about risks from the real-estate sector, calling upon them to strictly abide by rules limiting credit.
Some brokerages and analysts believe authorities likewise have wants to tighten credit via the capital market. Chinese media speculated in recent days that property firms may find it harder to issue bonds.