Systemic Flaw to Strike Chinese Banks in 5 Years: Expert?

Discussion in 'China' started by john70, Mar 30, 2012.

  1. john70

    john70 Regular Member

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    Systemic Flaw to Strike Chinese Banks in 5 Years: Expert

    The financial statements from China's state-owned banks failed to reflect their risk control capabilities and the system controlling how they are ruled will make their bad loan problems unsolvable, argued Xu Xiaonian, a professor with CEIBS, China's top business school.

    "The bank's potential risks and disguised poor efficiency will be clearer in three to five years," Xu said, citing widespread nonperforming loans following each economic cycle's climax in the country.

    "In 2009 and 2010 when the central government introduced the ¥4 trillion stimulus package, there were lower limits rather than upper limits for banks to lend money," Xu noted. "Failure to meet the lower limits would result in fewer perks so we can figure out the risks involved."

    Xu suggested finding out who lent to the Ministry of Railways, the operators of loss-making airports, highways and unfinished infrastructure projects, and finding the banks that funneled a combined ¥10 trillion to local governments.

    The bad loans at state-owned lenders were caused by China's macro system and therefore this problem is very difficult to overcome, according to Xu. Such government-dependent banks obediently acted like instruments to comply with policies, disregarding whether the policies made sense or not.

    Tricky issues are awaiting the nation's next leaders who are expected to take over later this year, Xu added.
     
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  3. W.G.Ewald

    W.G.Ewald Defence Professionals/ DFI member of 2 Defence Professionals

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    Is this Y2.017K?
     
  4. badguy2000

    badguy2000 Respected Member Senior Member

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    the writer doesn't know what CHinese banks are at all.....
     
  5. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    With local debt at 20 trillion RMB, it won't be long. Watch for Tianjin, it will be the first in the house of cards.

     
    Last edited by a moderator: May 10, 2015
  6. badguy2000

    badguy2000 Respected Member Senior Member

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    as I said long ago, Eruopeans ,including you, if you were really a frenchemen, should pay more attention to your business in your country,

    don't ask CHinese to save your ass when more eropean pigs appear.
     
    Last edited by a moderator: May 10, 2015
  7. badguy2000

    badguy2000 Respected Member Senior Member

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    as I said long ago, Eruopeans ,including you, if you were really a frenchemen, should pay more attention to your business in your country,

    don't ask CHinese to save your ass when more eropean pigs appear.

    after all, system flaw has stroken eurpean bank sysyem already
     
    Last edited by a moderator: May 10, 2015

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