By Bloomberg News
April 12 (Bloomberg) -- China’s banking regulator told lenders to reassess their risk exposures and submit reports by the end of June as officials try to prevent the nation’s credit boom from leading to more bad loans.
Inspectors will visit banks in the third quarter to check on the reports, Liu Mingkang, chairman of the China Banking Regulatory Commission, said yesterday at the Boao Forum for Asia in Hainan province. The regulator will discuss any discrepancies found, he said.
“By the end of the third quarter we will downgrade assets if needed and increase provisions,” Liu said, without elaborating.
China has tightened regulations on concern a record $1.4 trillion of lending last year is fueling asset bubbles and wasteful investment. The banking regulator last month reiterated a call for lenders to increase scrutiny of loans to property developers as the government ordered 78 state-controlled companies to exit the real-estate sector.
Some lenders in Beijing have “voluntarily and prudently” raised down payment requirements for second mortgages to 60 percent of a property’s value, the banking watchdog said in a statement elaborating on Liu’s speech. Nationwide, banks are asking for down payments of between 40 percent and 50 percent for second mortgages, Liu said.
The world financial crisis showed that leverage needs to be reduced, Liu said. Markets can never regulate and supervise themselves, he said, adding that financial regulations in China will go “back to the basics.”
Climbing Property Prices
China’s property prices rose 10.7 percent in February, the fastest pace in almost two years, fueling concern at the risk of asset bubbles as inflows of capital from abroad add to the money from domestic lending.
Liu cited Shanghai and Beijing as examples of property markets affected by so-called “hot money” and speculation.
The government aims to cut new lending by 22 percent this year from last year’s record.
Officials last month raised deposit requirements for buyers at land auctions to 20 percent of the minimum price to increase costs for developers. They have also lifted banks’ reserve requirements twice this year and re-imposed a tax on home sales.
The CBRC ordered lenders not to lend to developers holding land without building houses in a March 26 statement. It also asked banks to stop approving new credit lines to the 78 state-owned companies if they use collateral other than construction projects already in progress. |
发表于 2010-4-11 14:35
|