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China Weighs Raising Billions to Rescue Troubled Financial Firms

  • Deposit insurance plans, trust funds, banks would contribute
  • China moves to stem risks from small banks, weak developers

Chinese authorities are considering a plan to raise several hundred billion yuan for a new fund to backstop troubled financial firms, according to people familiar with the matter.

The People’s Bank of China is leading the effort, seeking to shore up confidence in the $60 trillion financial system as the economy slows and a debt crisis in the property industry spreads. The stability fund would dwarf other pools available to bail out troubled institutions and their depositors.