China Tells Banks to Limit Loans to Local States

China's banking regulator has told commercial lenders to restrict new lending they provide to local governments' financing arms to ward off potential risks of default, state media reported on Wednesday.

While relatively limited in scope, the step marks a continuation of efforts to check explosive lending growth that has set off concerns about asset price bubbles and the potential creation of a fresh crop of bad loans.

The China Banking Regulatory Commission (CBRC) ordered banks to inspect their existing loans to companies used by local governments to raise funds, and to stop lending to those projects that are backed only by expected fiscal revenues, the official Shanghai Securities News newspaper said, citing unnamed sources.

Read more

-------------------

Traderone : Can the market march on or move higher?