The Daily Update: China Eases Mortgage Lending - Rusty Pilots

According to various news outlets the China authorities are in the process of relaxing restrictions on home loans at some of their largest banks, as they try to mitigate the fallout from the ongoing Evergrande saga as well as any contagion to the wider property sector. Sources close to those in the know said China’s financial regulators instructed some major banks to accelerate approval of mortgages in the last quarter as well as allowing them to apply to sell securities backed by residential mortgages to free up loan quotas, reversing a ban imposed early this year.

With the issuing of residential mortgage-backed securities (RMBS), banks can move loans off their balance sheet and raise capital, then in turn offer more mortgages. The issuance of RMBS in September hit the highest level this year, according to Bloomberg. This comes after the authorities had asked banks to refrain from cutting off funding to healthy property firms, in a bid to help the sector through the current situation.

Indeed, at a meeting chaired by central bank Governor Yi Gang last month, the authorities told over 20 financial institutions to cooperate with governments to help ‘jointly maintain the steady and healthy development of the real estate market and safeguard the legitimate rights and interests of housing consumers’.

Finally, as we get back to some sort of normality, including jetting away for our holidays again, there was a sobering article on Bloomberg this morning. Rusty pilots all over the world are making small but potentially catastrophic errors — including forgetting to start the second engine for take-off and lowering the wheels for landing — after almost two years of sclerosis. Concerns are mounting that a lack of proficiency, confidence or one moment of forgetfulness by an out-of-practice pilot will lead to tragedy.