(Adds Politburo from paragraph 8)
By Donny Kwok and Nathaniel Taplin
HONG KONG/SHANGHAI, July 30 (Reuters) - China shares fell again on Thursday after a report that banks were trying to get to grips with their financial exposure to the stock market slump in June, added to a pall of uncertainty for investors.
Concerns about the level of borrowing to fund market positions have been magnified by the grey market - a loosely regulated network of state-owned commercial banks, trust companies, fund managers, and grassroots finance firms.
If banks decide to rein in their exposure to the stock market, it could squeeze a line of credit for potential buyers and so undermine confidence in a price recovery.
The benchmark CSI300 index of the largest listed companies in Shanghai and Shenzhen closed down 2.9 percent, while the Shanghai Composite Index closed down 2.2 percent.
Still, the performances were relatively calm compared with Monday, when stocks dropped more than 8 percent for their biggest one-day drop since 2007. Analysts have struggled to identify a single clear reason for the day's tumble.
Chinese authorities have scrambled to steady the rollercoaster stock markets this year. Share prices more than doubled in the six months to May, before crashing in June by more than a third.
Marshall Mays, director of Emerging Alpha Advisors, a fund management company in Hong Kong, said he expected Beijing to adopt a "whatever it takes" policy to underpin the stock markets. "The CCP cannot allow prices to collapse," he said, referring to the Communist Party.
China's Politburo, a decision-making body of the Communist Party, promised to step up targeted adjustments of economic policy to foster stable growth in the world's second-largest economy, local media said on Thursday - adding to a series of statements lately that could point to more policy easing at any time.
In a rare acknowledgement of the growth challenges faced by China, state radio quoted the Politburo as saying the country had yet to find new drivers to power its economy at a time when old engines were flagging.
To ensure the Chinese economy can sustain a "reasonable" pace of growth, the Politburo reiterated the government's line that it would keep economic policies broadly stable, while increasing targeted adjustments.
Citing unidentified bank officials, the China Securities Journal said Chinese banks had been checking their exposure to the stock market via wealth management products and loans collateralised with shares.
Banks have been a major source of lending to the grey market for stock investors but the pace of the stock market fall in June may have put their money at risk, analysts said.
Monday's shock drop jolted markets, and traders said many investors are now waiting on the sidelines to see if prices stabilise before they will buy shares again. The exact reason for the fall remains a mystery.
One explanation may come from money markets. Authorities had pumped a net 85 billion yuan ($13.7 billion) into money markets at the end of June, just as they were trying to stop a free-fall in share prices.
Stocks stabilised, but then the central bank began cautiously draining funds and short-term borrowing costs crept higher. On cue, stocks tanked on Monday.
Reporting by Donny Kwok in Hong Kong, Nathaniel Taplin and Pete Sweeney in Shanghai; Writing by Neil Fullick; Editing by Rachel Armstrong