Shanghai's banking regulator is telling commercial lenders in the city to run stress tests related to credit for real estate development.
The move comes as governments in several cities, including Shenzhen and Shanghai, have blocked the sale of properties linked to a number of developers including Kaisa Group and state-owned China Overseas Land and Investment.
The above-mentioned two developers suffered a credit crunch after lenders refused to extend more lending in the face of a sharp downturn in the property market.
Despite concerns over the legality of the move, city governments moved swiftly to freeze the companies' properties to protect creditors, a step that has been followed in several other cities.
