Property peril
In mid-April, when the government started taking stiff, unprecedented measures to prick the housing bubble, quite a few domestic lenders put up a brave front claiming they could stoutly bear even a 30-percent decline in property prices.
Yet, the latest warning by China's banking regulator may just be the signal commercial banks need to speedily apply the brakes and steer clear of mounting uncertainty in the realty sector.
In its 2009 annual report to take stock of the record 9.6-trillion-yuan ($1.4 trillion) in loans that Chinese banks granted last year to shore up flagging economic growth, the China Banking Regulatory Commission has cautioned in no uncertain terms about the risk contagion associated with continued lending to the property sector.
