China tells banks to scale back lending to contain financial bubble risks – Reuters

The Chinese authorities are asking banks to put a check on their lending this year, in order to safeguard against risks emerging from bubbles in dome  |  05/03/2021 09:57

 The Chinese authorities are asking banks to put a check on their lending this year, in order to safeguard against risks emerging from bubbles in domestic financial markets, Reuters reports, citing three bankers familiar with the matter on Friday.

Key takeaways

“The banks, including foreign and state-owned lenders, have received guidance from the central bank in the past few days telling them to restrict the overall size of their lending this year.”

“A large amount of money in the name of business loans had flown into the property and stock markets during the pandemic last year.”

These headlines come a few days after Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission (CBIRC) and Party secretary of the central bank, warned about the risks of bubbles emerging in global financial markets and the country’s property sector.

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