China to curb loans on speculation: state mediaChina's banking watchdog has vowed to tighten supervision over the use of new loans in an effort to prevent credit being diverted di·vert v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. into the stock and property markets, state media reported Friday. "We will strengthen supervision and control on the use of credit," Wang Huaqing, a leading official at the China Banking Regulatory Commission (CBRC CBRC China Banking Regulatory Commission CBRC Cutaneous Biology Research Center CBRC Canadian Business Resource Centre CBRC Copenhagen Brain Research Center CBRC Colorado Business Resource Center CBRC Combat Brigade Refresher Course ) told the central bank-run newspaper Financial News. "We will impose effective tracking and checks ... to prevent credit from being illegally funnelled into the stockmarket and the property market." Chinese banks, keen to heed Beijing's calls to support economic growth and fund government-backed projects, extended a record 7.73 trillion yuan Yuan (yüän), river, 540 mi (869 km) long, rising in S Guizhou prov. and flowing generally NE to Donting lake, Hunan prov., SE China. Navigation above Changde is limited by rapids to small craft. (1.1 trillion dollars) in new loans in the first seven months of the year. The aggressive lending has sparked concerns that some of the money has not been used to help the real economy, but has instead been put into asset markets for quick profit. The country's stock market surged 90 percent in the first seven months of this year before tumbling nearly 20 percent in the past month. Home purchases in major cities also hit record highs in recent months. A slowdown in lending would not hurt the overall growth of the economy, Chen Xiwen, deputy director of the Office of Central Financial Work Leading Group, told Dow Jones Newswires Dow Jones Newswires is the real-time financial news organization owned by Dow Jones. Founded in 1882, its primary competitors are Bloomberg L.P. and Reuters. The company reports more than 420,000 subscribers -- including brokers, traders, analysts and fund managers -- as of July . Banks rushed to lend in the first half, but not all of the lending went into the real economy, he said, adding it will take time for the loans to be digested. Regulators have raised concerns over credit risks and pledged to strengthen supervision and introduce stricter capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . The CBRC warned some mid-sized lenders Thursday that their capital adequacy ratios Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. had dropped to near the minimum requirement of eight percent due to excessively fast growth in some of their business, the China Daily reported. It has also proposed stopping banks counting cross-held subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". as part of their capital, spurring fears they could be forced to cut back lending or issue new shares to meet capital-adequacy ratios. However, the market slump in August led the CBRC to ease its stance on capital requirements, saying Thursday the rule would only be imposed "gradually", in an apparent attempt to restore confidence. 
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