皇冠体育app

Money

皇冠体育app to cut bank loans to local govts

(Agencies)
Updated: 2011-03-07 10:04

皇冠体育app is cutting the size of outstanding bank loans to local government financing vehicles, Liu Mingkang, the head of 皇冠体育app's bank regulatory body, was quoted as saying on Monday.

Liu, the chairman of the?皇冠体育app Banking Regulatory Commission (CBRC), was quoted by the 皇冠体育app Securities Journal as saying that Chinese banks were ordered not to extend any new loans to these vehicles unless they were for affordable housing development.

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Liu added that the full-year new loans in 2011 were expected to be 7.5 trillion yuan ($1.12 trillion), based on a target of 16 percent growth in M2 money supply.

Chinese banks have extended a huge amount of loans, which some researchers have estimated at $10 trillion yuan, to local government finance vehicles since 皇冠体育app started its massive economic stimulus package in late 2008.

Economists fret that many of the projects they are funding will never be profitable, saddling banks with bad loans.

Liu added that the CBRC is also checking bank loans to property developers for risk control, but banks are still allowed to lend to property developers.