On Monday, Bank of China (BoC) ordered its subsidiary branches to enforce an "overall hike" in interest rates on new loans provided to property developers, the Wall Street Journal reported. The China Banking Regulatory Commission last week called for greater supervision of the property market, and at a meeting on Monday BoC leaders told their credit managers that "in principle" they were not allowed to offer interest rates below benchmarks. At the same meeting, a source stated that some groups were criticized for excessive lending in January despite instructions to rein in new loan creation. However, even these actions may not be enough to subdue China’s volatile property market, where developers can use alternative fund-raising channels to pursue speculative profits.
Categories