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China’s central bank has ordered the nation’s lenders to strictly control new loans from the first quarter of the season, people familiar with the challenge said, in another proceed to curb excess leverage inside the financial system.

The brand new guidance from the People’s Bank of China puts a particular concentrate on 二胎, the people said, as authorities grapple to contain runaway property prices. And although the PBOC regularly seeks to steer banks’ credit decisions, this time additionally, it can make errant lenders pay more for deposit insurance, one of many people said.

The central bank declined to comment. Policy makers are attempting to strike an equilibrium between avoiding excess credit that fuels asset bubbles and keeping enough funding inside the financial system to satisfy the seasonal surge popular for credit in front of the start of the Lunar New Year holiday this week. President Xi Jinping along with his top economic deputies reaffirmed recently which they plan to prioritize the control over financial risks from the economy to stop asset bubbles.

“This is a continuation in the tightening trend we’ve seen ever since the second half of last year and extends from shadow banking to on-balance sheet loans,” said Wei Hou, a Hong Kong-based analyst at Sanford C. Bernstein & Co.

The PBOC could use its MPA framework to punish banks which don’t conform to the brand new lending rules by lowering rates of interest on reserves they have to deposit using the central bank, based on the people, who asked to never be recognized as the discussions are private. The central bank may also punish errant lenders through making them pay more for deposit insurance, one of the people said.

The latest instructions included a request for banks to help keep any boost in new mortgage lending from the first quarter beneath the increase noticed in the 4th quarter of this past year, the people said. The increase rate of total outstanding mortgages also needs to not exceed the fourth quarter rate, they added.

Chinese banks doled out a record 12.65 trillion yuan ($1.8 trillion) newest loans in 2016, with a lot of tending to front-load their lending within the first quarter of year hence they could record the interest income earlier. In the total new loans, 36 percent received out in the first quarter of last year.

In another indication of the time and effort to curb risks, the PBOC on Tuesday unexpectedly increased the rates on medium-term loans that this uses to control liquidity. Earlier, the central bank stated it would include wealth-management products held off bank balance sheets in the macro prudential assessment framework for gauging risk to dexqpky02 financial system starting from the first quarter.

The government has been targeting home loans ever since the fourth quarter to contain runaway property prices in areas deemed overheated.

At their annual economic work conference recently, Chinese leaders singled out property, proclaiming that “houses are made being inhabited, not for speculation,” in accordance with a post-meeting statement released by the official Xinhua News Agency. Besides mortgage curbs, China’s government is encouraging city-specific measures including raising down-payment requirements.

Along with setting a restriction on 房屋二胎, the central bank told banks to help keep other loans in order, the folks said. Bank of Communications Co. estimates that China’s new loans may reach 13.5 trillion yuan in 2017, which would be a new record.