Chinese regulators yesterday ordered banks to ensure unprecedented volumes of new loans were channelled into the real economy and not equity or real estate markets, where officials say fresh asset bubbles are forming.

The policy requires banks to monitor how loans are spent and comes amid warnings banks ignored basic lending standards in the first half of this year as they rushed to extend Rmb7,370bn ($1,079bn, €759bn, £655bn) in new loans, more than twice the amount lent in the same period a year earlier.