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Banks, Developers Sink as China Caps Loans to Curb Risk

  • Banks are given grace period of up to 4 years to comply
  • Move aims to promote property sector’s long-term stability
Under new regulations loans to developers will be capped. 

Under new regulations loans to developers will be capped. 

Photographer: Qilai Shen/Bloomberg
Updated on

Shares of Chinese banks and developers tumbled on Monday after regulators made an unprecedented move to cap loans for the real estate sector, the latest effort to snuff out systemic risks.

The CSI 300 Financials Index dropped 1.2%, while the gauge of Shanghai-listed property developers fell 2.3% to the lowest in six months.