"China's Major Banks Reduce Credit Risk by Limiting Exposure to Smaller Institutions"
Major Chinese banks are reducing their exposure to smaller banks by tightening interbank lending standards and reducing lending limits, in response to increasing credit risks exacerbated by the property debt crisis. This move aims to protect the larger banks from potential defaults but may lead to further financial strain on smaller banks, which rely more heavily on interbank borrowing. The situation has prompted local governments to sell special bonds to support these smaller institutions, and there is a possibility that the central government may need to introduce more supportive measures to maintain financial stability.