Not in China. Here the banks are embracing techniques they have not used before – including much-maligned strains of securitisation. China Construction Bank, the second largest lender, is poised to raise about $300m in the country's first domestic sale of commercial mortgage-backed securities.
China has two good reasons for bucking the back-to-basics trend. First, developing asset-backed securities markets further would reduce the overwhelming dependence on bank loans and equity for funding growth. CCB introduced the ABS concept three years ago with a small residential mortgage-backed deal, but the market is still officially in beta-test mode, awaiting a proper legal, tax and accounting apparatus. China saw $2bn of new issuance in the first half this year, according to Moody's – a quarter of India's output, and an eighth of South Korea's.
Second, China actually has buyers for this stuff (though they are almost all other banks, rather than insurance companies or pension funds). In Europe total CMBS issuance fell 91 per cent to just €3bn in the first half. Elsewhere rising defaults and a growing number of loans on watch lists mean there is limited appetite for increasing exposure to property.