Bank stress tests and falling house prices emotional
This article first appeared in the Shanghai Securities News, August 10, 2010, here on the original.
Property market policy objectives of regulation there is an official genuine, there are printing fell within 30%, in accordance with: bank stress test results show that property prices have fallen 30% will not lead to financial risks. another bank stress tests, is said to want to test a 60% fall in property prices, I think version of expected independent of the observed property prices high degree of 2007, America's subprime mortgage crisis, the Asian financial crisis in 1997, cross-debt-strand breaks trigger was caused because real estate prices plummeted. problem is: the financial risks of the real estate associated with how to measure?
indicators of the stress tests from 30% to 60%, not to say that property prices will fall by 60 percent, on the contrary, the real estate associated with loans in the total assets of bank credit accounted for a very low, down 60% to may trigger the bank's credit crisis. Golden State Securities Institute report, real estate-related loans accounted for less than 30% of the proportion of credit assets. National Banking credit assets totaling over 40 trillion, of which developer loans of less than 30,000 billion, accounting for less than 8 percent, according to statistics announced by the central bank, the end of June this year, households across the country and long-term consumer loan balance is less than 6 trillion, accounting for less than 16% even if the classification is ambiguous place count half of total government financing, coupled with less than 4 trillion, a total of less than 13 trillion of real estate related loans accounted for the proportion of the total credit assets is also just over 30%, it may trigger a financial risk of the real estate associated with loans proportion is about how much?
in my opinion, the financial risks are still far policy risks are very close, it is recommended that developers take the initiative to cut prices as soon as possible in order to appease cottage emotional. I judge the financial risk of the distance four indicators: first, before the U.S. subprime mortgage crisis in 1991, Japan's property market crash, real estate-related loans accounted for are close to or more than 60% once the credit total assets ratio; before the advent of the U.S. financial tsunami the ratio of the gross value of the tax base of residential property taxes and mortgage loan balance of more than 1:0.9 (data is 1:1), so house prices fell by 15% -30% led to the loss of millions of families residential foreclosures; Third, the Asian financial crisis was sparked off by Thailand, one of the reasons housing slump is a massive withdrawal of foreign capital, it should be concerned about the proportion of foreign investment in real estate related loans; housing prices if the incentive banks issuing home equity loans (HOME EQUITY LOAN), the scale of real estate credit, there may be out of control, China's current real estate market is almost no signs of the financial crisis and according to these four criteria, the major commercial banks in the loan rating or classification residents of long-term consumer loans defined as high-quality assets can also be regarded. the CBRC constantly requiring commercial banks to engage in stress tests come up with the quality of credit assets, the intentions of the care and thought, but unfortunately some experts have seized on the issue.
in China, commercial banks, mortgage lending business to carry out time is very short. the growth rate of the mortgage business quickly, but the proportion of total credit, innovative varieties, so from the point of view of financial risks, the Chinese residential market is not the higher prices the higher the risk: proportion of mortgage purchase loans with housing prices down! the anecdotes hot topic of
real estate market in the evening 9-10 points higher than long-term light house was known as the investment in housing, the countries, investors dark room rate transfer means that the financial risks have been dispersed to investors, the investor's ; demonstrate a high financial risk is also a lack of common sense, logical confusion. No wonder, the Health and turbulent times, the heart uneven, the world is uneven!
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