The China Banking Regulatory Commission (CBRC) has warned that rapid loan growth poses risks to mainland lenders and that a concentration of credit in certain industries may threaten the stability of the financial system, Bloomberg reported. “As lending expanded rapidly, the concentration risk of loans is becoming increasingly evident,” said Wang Huaqing, the CBRC’s disciplinary secretary, in a speech published on the regulator’s website on Tuesday. He said that as loans are increasingly focused on select industries, borrowers are regions, banks are vulnerable to economic swings and corporate failures. Chinese banks have issued US$850 billion in new loans in the first five months of the year, almost triple the amount issued in the same period of 2008, leading some to question the sustainability of such lending.
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