China tries to reassure markets about stress tests - KAIT Jonesboro, AR - Region 8 News, weather, sports

China tries to reassure markets about stress tests

BEIJING (AP) - Regulators tried to reassure financial markets about "stress tests" ordered on Chinese banks' real estate lending, saying Friday they do not represent official views of where the market is headed or any impending policy change.

Stock prices of Chinese banks and real estate companies fell this week following reports lenders tested the impact of a possible drop of up to 60 percent in real estate prices.

Banks were told in May to test the impact of possible declines of up to 30 percent in prices, the China Banking Regulatory Commission said.

"Testing all types of circumstances does not represent the CBRC's judgment about a tendency in the real estate market and does not represent a possible change in policy toward real estate credit," the agency said in a written statement.

It did not respond directly to reporters' questions about whether it had ordered new tests based on possible real estate price declines of up to 60 percent.

China's banks avoided the mortgage-related turmoil that battered Western lenders. But a surge in housing prices has spurred concern about a possible asset bubble that might expose lenders to losses if prices fall and speculators default on loans.

Results of the May tests have not been announced.

The president of Bank of China Ltd., one of China's four major state-owned lenders, said in May his bank would not suffer a big impact even if prices fell 30 percent.

Beijing imposed lending curbs in April to cool surging housing prices.

The government says prices fell in June for the first time in 18 months, declining 0.1 percent from May but still were up 11.4 percent over a year earlier.

Major Chinese banks are raising billions of dollars in new capital under orders from regulators to strengthen their balance sheets after lending a record 9.6 trillion yuan ($1.4 trillion) last year in support of Beijing's stimulus.

___

China Banking Regulatory Commission: www.cbrc.gov.cn

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Region 8 News</span><a class="customMoreLink" href="/Global/category.asp?C=4391" target="_top">More >></a>Region 8 NewsMore>>

  • Teen drowns in Region 8 lake, authorities investigate

    Teen drowns in Region 8 lake, authorities investigate

    Saturday, November 18 2017 7:49 PM EST2017-11-19 00:49:59 GMT
    Saturday, November 18 2017 7:55 PM EST2017-11-19 00:55:56 GMT
    (Source: Raycom Media)(Source: Raycom Media)

    According to the White County Sheriff’s Office, a teenager fell out of a boat at Bald Knob Lake and drowned.

    According to the White County Sheriff’s Office, a teenager fell out of a boat at Bald Knob Lake and drowned.

  • Church gives food to those in need

    Church gives food to those in need

    Saturday, November 18 2017 5:14 PM EST2017-11-18 22:14:16 GMT
    Saturday, November 18 2017 6:40 PM EST2017-11-18 23:40:15 GMT
    (Source: KAIT)(Source: KAIT)

    Philadelphia Baptist Church held their annual "Feeding the Multitudes" event on Saturday.

    Philadelphia Baptist Church held their annual "Feeding the Multitudes" event on Saturday.

  • Winter Wonderland Ice Skating Rink now open

    Winter Wonderland Ice Skating Rink now open

    Saturday, November 18 2017 5:41 PM EST2017-11-18 22:41:28 GMT
    Saturday, November 18 2017 6:36 PM EST2017-11-18 23:36:18 GMT
    (Source: KAIT)(Source: KAIT)

    The Winter Wonderland Ice Skating Rink officially opened in Jonesboro on Saturday.

    The Winter Wonderland Ice Skating Rink officially opened in Jonesboro on Saturday.

Powered by Frankly