China To Stress Test Banks for 60 percent Home-Price Drop

China’s banking regulator told lenders last month to conduct a new round of stress tests to gauge the impact of residential property prices falling as much as 60% in the hardest-hit markets, a person with knowledge of the matter told Bloomberg News. Banks were instructed to include worst-case scenarios of prices dropping 50% to 60% in cities where they have risen excessively.

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