Banking News
- Regulator urges banks to curb loan growth
Date: 15-Nov-2007 Sources: (Shenzhen Daily)
THE country's banking regulator had urged banks to tighten lending as it strived to keep loan growth below ceilings, domestic media said yesterday.
China Banking Regulatory Commission summoned an industry meeting Tuesday to tell banks to further control their lending pace to meet the regulator's target of 15 percent in loan growth for 2007, the Shanghai Securities News reported.
Outstanding yuan-denominated loans grew to 26 trillion yuan (US$3.5 trillion) by the end of October, up 17.7 percent from a year earlier, according to figures released by the central bank Monday.
China has taken a series of measures to curb excessive liquidity in its financial system to help prevent the economy from overheating, including five interest rate hikes so far this year.
The government announced Saturday another increase in the bank reserve requirement - the money banks need to set aside with the central bank - the ninth such increase this year.
To meet the banking regulator's target of 15 percent in lending growth, domestic banks can only lend a combined 85 billion yuan for the rest of 2007, or a mere 2.4 percent of the money they have already lent this year.
It looks unlikely that the government target will be met, an industry insider told the newspaper.
The agency only has limited ways of imposing its will on the banks, such as forcing them to buy government paper at below-market yields.
The banking regulator has been cracking down on loans illegally going into the country's red-hot stock market and property sector and has punished some lenders for sloppy risk control.
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