China's banking regulator will investigate a sudden spike in consumer loans and other bank credit believed to be fuelling speculation on the nation's stock market, state press said Monday. Chinese authorities are concerned that market fever on the mainland is transferring capital market risks to banks, Xinhua news agency said.
"We will look into the source of funds that are entering the market and also at how much money is involved," the report quoted Fan Wenzhong of the China Banking Regulatory Commission's research institute as saying. The regulator will probe the increase and take necessary measures, he said.
Fan's comments come after the Shanghai stock market fell nearly nine percent in trading on Tuesday last week in the biggest fall in a decade. The market finished the week 5.5 percent down, and dropped another 1.63 percent Monday.