Financial Regulatory Forum

EXCLUSIVE – China tells banks to ensure loans are used properly

SHANGHAI, Feb 1 (Reuters) – China’s banking regulator has ordered lenders to conduct checks on whether any of their loans have illegally gone into the stock or property markets, a banking source told Reuters on Monday, the latest step in a clampdown on excessive lending and rising asset prices.

Credit found used for improper purposes must be withdrawn within a certain period of time, said the source, who had seen the relevant notice from the regulator. He did not elaborate on the timeframe.

The order from the China Banking Regulatory Commission (CBRC) marks further efforts by Beijing to rein in rampant lending and ensure that credit is being used to generate genuine economic activity and not simply to fuel speculation in stocks and property.

“The CBRC has recently found that some banks have loosened management of their lending practices, some industrial companies have illegally used bank credit to invest in stocks and property, while some individuals have used consumer loans to trade stocks,” said the source.

It is not unusual for the CBRC to issue such orders, though it is unclear how it will actually implement them.

BREAKINGVIEWS-China’s tightening still embryonic

– The author is a Reuters Breakingviews columnist. The opinions expressed are her own –

By Wei Gu

HONG KONG, Jan 20 (Reuters Breakingviews) – The world is nervous about China putting the brakes on its bubbling financial system. Beijing has this week ordered some banks to slow their lending. Markets did not take it well. But as tightening goes, the moves are pretty limited.

Some 1 trillion yuan ($161 billion) of new loans were already advanced during the first half of January, compared with 1.6 trillion yuan for the first month of 2009. That is well above the pace that the authorities’ 2010 loan limit of 7.5

U.S. says banks getting help cut lending in July

REUTERS/Cheryl Ravelo WASHINGTON, Sept 15 (Reuters) – The U.S. Treasury Department said on Tuesday that banks receiving government bailout funds cut their new lending by 10 percent in July. (more…)

China asks banks to curb month-end lending -bankers

china-regulator    SHANGHAI, Aug 28 (Reuters) – China’s banking regulator has given Chinese banks verbal instructions that they must not rush into end-of-the-month lending as the close of August draws near, bankers at several Chinese banks told Reuters on Friday.