Shanghai banking regulators call for tighter lending

Particularly to real estate developers.

It has been reported that the Shanghai banking regulator recently urged local banks to be aware of potential credit risk for unit trust funds in the real estate sector.

According to a research note from Kim Eng, the authority also emphasized that local banks should strictly enforce the new policy on bank lending to real estate developers issued earlier.

Kim Eng says that apart from rolling out cooling measures such as purchase restriction and tightening mortgage standard, it believes the policymakers will continue to tackle illegal financing in the real estate development sector, which may drive up funding costs among Mainland developers.