China’s banking regulator told larger banks to conduct quarterly stress tests on property loans and ensure the risks attached to such lending is strictly controlled after the government tightened credit rules to crack down on real-estate speculation.

Financial institutions must implement the central government’s property controls and use mortgage loan policies to “strictly” limit housing speculation, Liu Mingkang, head of the China Banking Regulatory Commission, said in a statement posted on the agency’s Web site yesterday.

bloomberg.com