China’s banking regulator is again warning concerning the financial perils of the overheated property market, now flagging risks from off-balance-sheet credit channels.
The China Banking Regulatory Commission wants to restrict credit to the property sector by strengthening the supervision of 民間二胎 and banks’ wealth-management products, according to a statement posted on its website Saturday.
China should “strengthen risk control comprehensively, to hold 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 major coastal cities such as Shanghai, and several smaller, less-affluent cities.
As fears grow regarding a property bubble, local governments recently imposed new restrictions made 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 dealt with brokers and developers to aid buyers come up with down payments.
The banking regulator looked at the home market at the meeting Friday to examine the condition of China’s economy and financial system in the third quarter.
In their statement using the meeting, the regulator said it would be more strict on property loans, take a careful approach in the creation of property-related businesses and prohibit funds from flowing in to the sector illegally.
The regulator has said the rapid boost in property loans posed ” new challenges” for China’s government, but is currently acknowledging the influence of funds from your shadow-banking industry around the real-estate sector.
While mortgages make up many of the funds likely to property, about 30% of credit on the sector emanates from non-bank sources, including trusts, wealth-management products and dexlpky83 channels. Real estate took up 8.5% of credit issued by trusts during 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 about them to strictly adhere to rules limiting credit.
Some brokerages and analysts believe authorities also provide intends to tighten credit through the capital market. Chinese media speculated in recent days that property firms may find it harder to issue bonds.