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 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 an announcement posted on its website Saturday.
China should “strengthen risk control comprehensively, to keep fast the bottom line on the occurrence of systemic financial risk,” the statement said.
A flood of credit has entered China’s property market this year, driving up prices in major 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 have been attempting to curb risky practices by banks, a few of which have offered credit lines to borrowers with few questions asked and dealt with brokers and developers to help buyers develop down payments.
The banking regulator checked out the house market with a meeting Friday to analyze the condition of China’s economy and financial system through the third quarter.
In its statement following the meeting, the regulator said it could be more strict on property loans, take a careful approach in the introduction of property-related businesses and prohibit funds from flowing in the sector illegally.
The regulator has already said the rapid boost in property loans posed ” new challenges” for China’s government, but has become acknowledging the influence of funds from your shadow-banking industry in the real-estate sector.
While mortgages form a lot of the funds gonna real estate property, about 30% of credit for the sector emanates from non-bank sources, including trusts, wealth-management products and dexlpky83 channels. Real-estate took up 8.5% of credit from trusts during the second quarter this year, in accordance with latest data through the China Trustee Association, a government-backed industry group.
Many economists expect Beijing to introduce further tightening measures.
This week, the Shanghai branch of the People’s Bank of China warned executives from more than two dozen 房屋二胎 about risks inside the real-estate sector, calling upon them to strictly adhere to rules limiting credit.
Some brokerages and analysts believe authorities also have wants to tighten credit through the capital market. Chinese media speculated in recent days that property firms will find it harder to issue bonds.