China’s top banking regulator warns of bad debt, local real estate bubbles

Investing.com - Financial Markets Worldwide

Please try another search

Economy4 hours ago (Jun 10, 2021 01:16AM ET)

© Reuters. FILE PHOTO: People walk at the Beijing’s central business district (CBD), on the day of the opening session of the National People’s Congress (NPC) in Beijing, China March 5, 2021. REUTERS/Tingshu Wang

SHANGHAI (Reuters) – China’s top banking and insurance regulator said banks should guard against a rise in non-performing assets, as the country rolls back some of the relief measures implemented during the pandemic to help firms withstand the fallout.

In 2020, the central bank encouraged financial institutions to lower rates for virus-stricken firms and extend payment deadlines, among other measures, to give borrowers some breathing space during the coronavirus crisis.

“The default rate for some large and medium-sized enterprises has risen, and the credit risks at banking institutions has intensified,” Guo Shuqing told a financial forum in Shanghai via a video message.

He said a growing trend of local real estate bubbles remained “serious”.

Corporate bond defaults have risen sharply in China in recent years, reaching $14 billion in 2020, according to the Institute of International Finance. Chinese banks extended a record $3 trillion in new loans in 2020, according to data from the People’s Bank of China.

Investors should also be aware of potential investment losses on financial derivative products, commodity-linked futures, and rising Ponzi schemes, Guo said.

The regulator will also resolutely clean up illegal security issuance activities and fend off the pick-up in shadow banking activities, Guo added.

Commenting on global markets, Guo, who also serves as the Communist Party chief at the central bank, said that monetary policies in some developed countries are “unprecedentedly loose.”

“These measures have stabilised the market in (the) short-term but require all countries in the world to share responsibility for the negative effects,” he said.

A rise in global inflation has arrived and may last longer than some of the U.S. and European experts have expected, Guo added.

Related Articles

U.S. CPI, ECB Meeting, Bitcoin and GameStop - What's Moving Markets

U.S. CPI, ECB Meeting, Bitcoin and GameStop – What’s Moving Markets
By Investing.com – Jun 10, 2021
3

By Peter Nurse
Investing.com — Much-anticipated U.S. consumer prices are due for release, the ECB meets, Bitcoin rebounds after El Salavador adopts the digital currency, GameStop…

Analysis-The great British reopening: how investors are picking their bets

Analysis-The great British reopening: how investors are picking their bets
By Reuters – Jun 10, 2021

By Tommy Wilkes and Joice Alves LONDON (Reuters) – Cinema tickets, traffic jams, office footfall, web conferencing, even private jet leasing: investors are parsing motley metrics…

Chinese companies free to choose listing venues, but must obey laws - regulator

Chinese companies free to choose listing venues, but must obey laws – regulator
By Reuters – Jun 10, 2021

SHANGHAI (Reuters) – China’s top securities regulator said on Thursday that Chinese companies are free to choose their listing locations but they must abide by local laws and…

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Read More

Written by 

Leave a Reply

Your email address will not be published. Required fields are marked *