China’s banking regulator is again warning regarding the financial perils of an overheated property market, this period flagging risks from off-balance-sheet credit channels.
The China Banking Regulatory Commission wishes to restrict credit for the property sector by strengthening the supervision of 民間二胎 and banks’ wealth-management products, as outlined by an announcement posted on its website Saturday.
China should “strengthen risk control comprehensively, to carry fast tha harsh truth on the occurrence of systemic financial risk,” the statement said.
A flood of credit has entered China’s property market this coming year, driving up prices in main coastal cities for example Shanghai, and a few smaller, less-affluent cities.
As fears grow about a property bubble, local governments have recently imposed new restrictions created to tighten banks’ home-lending standards.
Meanwhile, financial regulators have been looking to curb risky practices by banks, a few of which have offered credit lines to borrowers with few questions asked and worked with brokers and developers to assist buyers put together down payments.
The banking regulator looked at the property market at a meeting Friday to review the state of China’s economy and financial system through the third quarter.
In their statement using the meeting, the regulator said it might be more strict on property loans, go on a careful approach in the introduction of property-related businesses and prohibit funds from flowing in 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 in the real-estate sector.
While mortgages constitute many of the funds likely to real estate, about 30% of credit for the sector originates from non-bank sources, including trusts, wealth-management products and dexlpky83 channels. Property took up 8.5% of credit issued by trusts through the second quarter this year, as outlined by latest data through the China Trustee Association, a government-backed industry group.
Many economists expect Beijing introducing further tightening measures.
In the week, the Shanghai branch in the People’s Bank of China warned executives from greater than two dozen 房屋二胎 about risks from the real-estate sector, calling about them to strictly comply with rules limiting credit.
Some brokerages and analysts believe authorities also provide wants to tighten credit using the capital market. Chinese media speculated in recent days that property firms may find it harder to issue bonds.