Global Banking Woes Put Spotlight on China Regional Lenders
- China’s small banks struggle to borrow, saddled with bad debt
- China has moved to reduce financial risk over the past years
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A global banking crisis has put China’s struggling regional lenders under new scrutiny following a sharp slowdown in the economy. But recent moves from Beijing should give investors some comfort.
As in the US, China has a problem with its smaller regional banks, who sit on more than 100 trillion yuan ($14.5 trillion) in assets. After years of efforts by authorities to rein in risks in the sector, concerns are rising once again after the failure of Silicon Valley Bank and as a number of smaller banks recently refrained from using redemption options on bonds they had issued.