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Banks to have home loan stress tests

2010-04-21 15:48 BJT

China's top banking regulator has warned banks against extending loans for speculative property investments. It's also ordered big lenders to carry out quarterly stress tests of real estate loans.

Head of the China Banking Regulatory Commission, Liu Mingkang says banks must re-assess the risk of lending to financing vehicles run by local governments. He says banks must attach greater importance to control full year loan growth. They must also implement dynamic individual mortgage loan policies, and limit speculative borrowers.

Liu added that there are still many macro-economic challenges remaining, even though first quarter economic growth accelerated to an 11.9 percent year on year pace.

Editor: Zhang Ning | Source: