Chinese banks must “strictly” control their lending to help maintain economic stability, the Financial News reported on Friday, quoting the country’s top banking regulator.
“Financial institutions must strictly control the overall size of their lending to help maintain fast and stable growth of the national economy,” the newspaper quoted Liu Mingkang, chairman of the China Banking Regulatory Commission, as saying.
Banks should step up their risk controls, boost lending to small- and medium-sized firms and develop intermediary services, Liu was quoted as saying.
Liu’s remarks followed a series of government tightening steps in recent weeks to cool rapid rises in bank credit and fixed-asset investment amid fears of economic overheating.
Last week the central bank moved to raise bank reserve requirements after economic indicators showed little sign of flagging in the face of previous tightening measures, including an interest rate rise in April.
China would “unwaveringly” push forward financial reforms to help shore up the banking system, Liu said.
Regulators have said China must push reforms, despite criticism that Beijing has been selling stakes in the country’s financial institutions to foreigners too cheaply.