In response to ongoing risks in its property sector, China has announced an expansion of regulatory oversight for major banks. The number of Domestic Systemically Important Banks (D-SIBs) has increased from 19 to 21, including a mixture of state-owned and joint-stock commercial banks, reflecting the government's effort to stabilize its financial system. The regulatory authorities emphasized their commitment to bolster supervision, aiming to ensure that these important institutions operate securely amid economic pressures.

Despite heightened scrutiny, Chinese banks have yet to report significant rises in non-performing loans, with the commercial banks' non-performing loan ratio remaining stable at 1.5% at the end of 2025. Data from the National Financial Regulatory Administration (NFRA) supports this perspective, indicating that the majority of large commercial banks maintain low bad-loan ratios, with figures around 1.22% for large banks and 1.21% for joint-stock banks. This stability suggests that while regulatory measures are increasing, the immediate financial health of banks appears resilient.

The implications of these regulations point towards a more cautious approach by China's financial authorities in managing potential collapse in the real estate market, which could have far-reaching impacts not only on the banking system but also on the broader economy. As the government seeks to shield its financial institutions, ongoing vigilance will be required to navigate the complex challenges that the property market presents, ensuring that both banks and the economy can weather potential downturns effectively.