The problems of the troubled Chinese real estate developer Evergrande are unlikely to lead to a financial crisis, the South Korean central bank also says.

According to the bank, this is because local banks will run little risk and because Chinese regulators control the market.

Earlier this week, the Chinese central bank stated that the faltering Chinese real estate giant China Evergrande Group does not pose a major threat to the financial system.

Evergrande is the second largest property developer in China.

The real estate group has long dominated the news, due to a sky-high debt of around 250 billion euros and changing rules in China.

On Monday, the company again failed to pay interest on bonds.

This causes the company to falter, with potentially major consequences for the rest of the system.

Evergrande owes money to 171 Chinese banks and 121 other financial companies.

If it collapsed, it could drag banks into its trap.

There are fears in the financial markets of a possible domino effect if the company collapses.

The comparison with the American Lehman Brothers is often made.

The end of that investment bank marked the beginning of the economic and financial crisis, more than ten years ago.

But there is no cause for major concern, according to the Bank of Korea.

The Chinese government can come to Evergrande's aid when needed and help keep construction projects going.

China is also benefiting from the recovery of the global economy that has been hit by the corona crisis.

The country can compensate for a possible shock of a crisis.

The problems created by Evergrande could slow down the growth of the Chinese economy, but the impact will be limited, the South Korean central bank expects.

Keywords: central bank, evergrande, chinese, problems, real estate developer, regulators, banks, crisis, bank, south korean, malaise, system., company, market, threat