Business Maverick: China’s Troubled Banks Get a Lifeline from Local Governments

At least 10 small Chinese banks have raised money this year by selling shares packaged with non-performing loans, in several cases to buyers controlled by local authorities. In at least one deal, the NPLs were sold at above-market rates.

The transactions, while modest in number given China has 3,000-plus small banks, show the determination of local authorities to shore up the linchpins of their district economies. The health of small banks has become a growing concern after the seizure of one lender in May forced losses on creditors and cast doubt on the longstanding assumption that the state would always backstop troubled banks.

The capital injections amount to “local government bailouts through cash rich state-owned enterprises,” said Alicia Garcia Herrero, chief economist for the Asia Pacific region at Natixis SA. Regulators have learned it’s better to rescue troubled banks indirectly to limit the risk of contagion, she said.

South Africa South Africa Latest News, South Africa South Africa Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Business Maverick: JP Morgan’s Dimon Laments Income Inequality, Won’t Assail CEO PayJP Morgan Chase & Co.’s billionaire Chief Executive Officer Jamie Dimon called US income inequality a “huge problem,” but he stopped short of saying America’s top executives were being paid too much.
Source: dailymaverick - 🏆 3. / 84 Read more »

Business Maverick: November 11: Five Things You Need to Know to Start Your DayAlibaba’s Singles’ Day is off to a flying start, the Hang Seng Index is showing signs of strain, and only those loyal to Beijing need to apply for Hong Kong’s chief executive position. Here are some of the things people in markets are talking about today.
Source: dailymaverick - 🏆 3. / 84 Read more »