| China: Reasonable loan growth to be encouraged |
BEIJING, August 8 -- China's banking regulator will urge banks to help ensure that lending growth this year will be limited to a reasonable range, said China Banking Regulatory Commission Vice Chairman Jiang Dingzhi.
"We should keep a close watch on three risks: credit risks brought about by overcapacity and structural problems in some industries, market risks from exchange and interest rate reform, and the operational risks of bills business for banks," said Jiang in a statement posted on the banking regulator's Web site late Sunday.
Jiang, who didn't say what a reasonable range for loan growth would be, also said commercial banks should adjust their loan structure and offer more loans to small enterprises.
His comments follow government measures in recent months to fend off excess loan growth following a rapid growth in loans in the first half of this year.
New loans made by financial institutions in the first half totaled 2.18 trillion yuan, accounting for 86 percent of the central bank's full-year target of 2.5 trillion yuan.
On July 21, China's central bank increased banks' reserve requirement ratio by 50 basis points, the second such move in two months. The hikes in the reserve requirement ratio followed a 0.27-percentage-point increase in bank's one-year lending rates in April, the first rate hike since October 2004. Enditem
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