The China Banking Regulatory Commission has indicated that it considers risk in relation to real estate loans to lie within a “controllable” threshold.
Xiao Yuanqi, the head of CBRC’s Prudential Regulation Bureau said at a recent conference that the quality of real estate loans is quite good and that “speaking overall, real estate loan risk is quite low.
“The results of stress tests also clearly indicate that these risks are clearly within controllable boundaries.”
Xiao said that CBRC would continue to closely watch changes in real-estate lending, issue risk warnings to small and medium-sized developers as well as third and fourth-tier cities with excess real estate supplies, as well as institutions with high concentrations of real estate loans.
Xiao’s remarks follow a crackdown on the lending sector of unprecedented intensity, launched by CBRC chair Guo Shuqing shortly after he assumed office in February.
The crackdown has seen the rapid-fire release of a slew of directives by CBRC in relation to risk management and inspection, as well as the issuance of a string of administrative penalties to banks for regulatory infractions.