There are stress tests, and there are stress tests. And it sounds as though China is conducting the latter.
According to FT, the country’s banks have been ordered to assess their viability if real estate fell 50%.
Does this portend some kind of pricking of the much-hyped real estate bubble? Some might read it as that, but it can also be read simply as prudent banking regulation that’s getting ahead of any potential problems. It’s not as though Beijing has been sanguine about the country’s wild real estate ride.