40 Banks Shut Down in Sudden ‘Vanishing Act’ – Absorbed Into Larger Lenders As Economy Teeters in China: Report
Banks are collapsing at an unprecedented rate in China due to a major downturn in the country’s property market, poor risk controls and other issues.
In the week ending on June 24th, 40 smaller banks were sucked up by larger institutions, a vanishing act incomparable even to the savings and loan crisis of the 1980’s and 90’s, reports The Economist.
The report tracks roughly 3,800 lenders in rural China that hold a whopping $7.5 trillion in assets, or 13% of the entire banking system, that are starting to bleed out due to an overstock of bad loans. Some of them have admitted that as much as 40% of their portfolios are non-performing loans.
Thirty-six of the 40 failed institutions were all absorbed into one giant lender: Liaoning Rural Commercial Bank, which was set up by regulators in September to manage bad banks.
According to the Economist, five similar institutions have been created in the last 10 months for the same purpose of absorbing small bad banks – which critics warn will only lead to “bigger, badder” banks.
SHOCK REPORT: 40 Chinese Banks VANISH IN ONE WEEK, marking severe consequences for the global economy.
— Chuck Callesto (@ChuckCallesto) July 12, 2024
DEVELOPING..
In just one week, 40 banks disappeared in China.
The collapse of Jiangxi Bank severely deepens the financial sectors problems..
Concerned clients can be seen… pic.twitter.com/fk0reKn7BP
https://www.economist.com/finance-and-economics/2024/07/04/why-chinese-banks-are-now-vanishing