A commission looking into debt accumulated by China’s local governments has discovered "problems" with about US$300 billion worth of the loans, Bloomberg reported, citing the Shanghai Securities Journal. An unidentified source was quoted by the paper as saying the investigation has been "basically completed." The newspaper said outstanding loans taken by local government financing vehicles totaled some US$1.15 trillion as of late June, and that local governments would face difficulty in repaying about 26% of that debt. Many investors are worried that China’s banks could face a crippling wave of bad debt – some of it owed by local governments – when loans accumulated during the 2009 government-directed lending spree fall due.