S&P says China will trigger new Asian banking crisis

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  1. Anees
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    Anees Major Staff Member MODERATOR

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    S&P says China will trigger new Asian banking crisis

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    INVESTMENT BANKING | Staff Reporter, China Published: 04 Oct 13

    Standard & Poor’s Ratings Services yesterday warned of a threat to Asia’s financial stability from a credit and debt bubble in China. It said China’s slower economic growth could trigger a surge in bad loans and fuel a further expansion of the shadow banking sector the government has failed to control.

    “A regional banking crisis isn’t out of the question,†S&P said.

    S&P’s is concerned largely with shadow banking, or the off-balance sheet lending by China’s banks that is unmonitored by regulators.

    S&P said “ . . . years of very rapid credit expansion on- and off-balance-sheet, along with a strong increase in housing prices, is set to backfire on banks’ asset quality, profitability, and possibly liquidity.â€

    S&P, however, acknowledges that Beijing would bail out the finance sector in an emergency.

    The ratings firm also sees significant risks in India, where lenders face massive threats from poor economic growth, a sliding rupee and spiking interest rates. S&P said this negative combination likely means an increase in NPLs or non-performing loans.

    S&P says China will trigger new Asian banking crisis | Asian Banking & Finance
  2. layman
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    layman Lt. General Staff Member ADMINISTRATOR

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    It is ticking bomb awaiting a trigger... Chinese provinces are accumulating so much debts and they are being constantly wiped out to clean their stupendous records. It is jus matter of time before there is no space to dump the trash debt.

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