China's bank regulation chief said lenders have "more than" enough capital and urged them to extend credit to consumers and smaller companies even amid the risk of asset bubbles.
Liu Mingkang, the chairman of the China Banking Regulatory Commission, also told banks to support rural development, health care, energy saving and pollution reduction in an opinion piece in Bloomberg News on Monday. "Structural bubbles threaten to emerge," he cautioned, in the world's third-biggest economy.
A record $1.3 trillion of new loans in the first 11 months of 2009 drove China's recovery — at the risk of more nonperforming loans and the creation of stock and property market bubbles. At the same time, the government is pressing banks to steer money toward small businesses that are short of funds.
"Strong buffers," including capital, liquidity and provisioning requirements, have limited risks to the banking system from the lending surge, Liu wrote.
The regulator did not say whether China would cap lending this year.
