HK/China Banks Daily News Highlights

• China: To strictly curb credit needs for property speculation — China willcontinue to strictly curb credit used for property speculation, the bankingregulator said Thursday. The CBRC reiterated that China will suspend credit fora household's third house in some areas where property prices are overly highand price rises are overly quick, according to a question-and-answer statementposted on its website. (WSJ)
• Banks told stop third-home loans — CBRC has reportedly ordered banks tostop offering mortgage loans for third homes in four key cities. All banks inBeijing, Shanghai, Shenzhen, and Hangzhou were told by CBRC to stop thirdhomelending, according to Reuters. Banks in other cities must require thirdhomebuyers to raise down payments to 60%, and they will be chargedmortgage rates 50% higher than the central bank's benchmark. (The Standard)
• China tries to ease stress test jitters — CBRC said Thursday that the stresstests it required on Chinese banks' property credit don't indicate thegovernment's assessment of property-market trends or a possible change inloan policy, after property and bank shares dropped on news that lenderstested the possible impact of a plunge in real-estate prices. The commentswere intended to ease worries over the implications of stress tests amongcommercial banks on property credit. (WSJ)
• PBOC repeats goal to continue moderately monetary policy — PBOC saidThursday it would maintain its moderately loose monetary policy and enhancefinancial support to boost the economy’s sustainable development. The bankwill apply multiple monetary tools to keep an appropriate growth in moneysupply in a bid to strike a balance between meeting the need of fundingeconomic development and managing the inflation expectation, the PBOC saidin a statement posted on its website. (XinHua News)
• China may cut required reserves by end-Sept — China may cut banks' reserverequirements in the next two months as part of a modest loosening of monetarypolicy, the country's semi-official banking association said in a quarterly report.The National Association of Financial Markets Institutional Investors (NAFMII),a body which comes under PBOC, said the central bank would mainly rely onopen-market operations for its fine-tuning of policy in the third quarter. "Thereis the possibility that it will cut the deposit reserve ratio", NAFMII said.(Reuters)