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Financial system at risk from bank loans
Source: AFP |
December 27, 2012, Thursday
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CHINA'S financial system is facing increasing risks due to soaring bank loans, with lending to the property sector and local governments a particular concern, the finance ministry warned yesterday.
Bank lending has been rising "at a high speed" in recent years and the quality is yet to be tested, Li Yong, vice finance minister, was quoted in a statement as saying.
"There are rather high potential risks, particularly in (loans extended to) the real estate sector and its related industries and in the poorly designed maturity of lending granted to local government financing vehicles," he said, without elaborating.
He made the remarks at a national financial work conference earlier this month, according to the statement.
Chinese banks extended 7.75 trillion yuan (US$1.2 trillion) in new loans in the first 11 months of this year, 919.1 billion yuan more than the same period of last year, official data showed.
Lending to the property sector totaled 982.1 billion yuan in the first three quarters of the year, 10.2 billion yuan less than a year earlier, according to the latest central bank quarterly report.
China has for the past two years tried to tighten policies on the real estate sector to rein in rising home prices, which dampened speculation and strained property developers' cash flow.
Bank lending has been rising "at a high speed" in recent years and the quality is yet to be tested, Li Yong, vice finance minister, was quoted in a statement as saying.
"There are rather high potential risks, particularly in (loans extended to) the real estate sector and its related industries and in the poorly designed maturity of lending granted to local government financing vehicles," he said, without elaborating.
He made the remarks at a national financial work conference earlier this month, according to the statement.
Chinese banks extended 7.75 trillion yuan (US$1.2 trillion) in new loans in the first 11 months of this year, 919.1 billion yuan more than the same period of last year, official data showed.
Lending to the property sector totaled 982.1 billion yuan in the first three quarters of the year, 10.2 billion yuan less than a year earlier, according to the latest central bank quarterly report.
China has for the past two years tried to tighten policies on the real estate sector to rein in rising home prices, which dampened speculation and strained property developers' cash flow.
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