Standard & Poor’s said that regional commercial banks in China faced higher risks than national commercial banks when it came to exposure to local government financing vehicles (LGFVs). The five banks that showed the largest proportional growth in lending to LGFVs were four regional commercial banks and one policy bank: Evergrowing Bank in Shandong, Industrial Bank in Fujian, China Zheshang Bank in Zhejiang, China Bohai Bank in Tianjin and policy bank, the Export-Import Bank of China. Regional banks face greater risks because they are subject to significant local government influence in the regions where they operate, says S&P Analyst Tan Kim. S&P’s concern over Chinese banks and LGFVs comes on the heels of similar warnings from Fitch Ratings, Moody’s and Dragonomics. Problems at the estimated 6,576 LGFVs could lead to a wave of defaults. Lending has slowed recently, but this has been compensated by new credit channels outside the banking system. Fitch Ratings estimated that, by the end of this year, total financing, which includes credit from both bank and non-bank channels in China, will reach 185% of GDP, up 61 percentage points from 2007, the South China Morning Post reports.