https://www.wsj.com/articles/another-month-another-chinese-bank-bailout-11564142953?mod=rsswn
Beijing dislikes bailing out state companies—particularly banks—but can’t seem to kick the habit. The latest example is Bank of Jinzhou.
On Thursday, this small Northern lender said it was in talks with possible strategic investors. The bank has struggled since regulators’ unexpected takeover of one of its peers in late May spooked debt markets.
China’s largest state-owned commercial bank and two of the country’s centrally administered “bad banks” are behind the potential investors, according to Chinese financial media outlet Caixin. Regulators also met in recent days to discuss liquidity problems at the Bank of Jinzhou, Reuters reported.
What is interesting is the contrast with Baoshang Bank, whose takeover originally sparked the debt market flare-up in June. When regulators first said they were taking control, they were explicit that, retail deposits aside, only liabilities of 50 million yuan ($7.2 million) or less would be fully guaranteed without question. Chinese money markets promptly panicked.
Beijing dislikes bailing out state companies—particularly banks—but can’t seem to kick the habit. The latest example is Bank of Jinzhou.
On Thursday, this small Northern lender said it was in talks with possible strategic investors. The bank has struggled since regulators’ unexpected takeover of one of its peers in late May spooked debt markets.
China’s largest state-owned commercial bank and two of the country’s centrally administered “bad banks” are behind the potential investors, according to Chinese financial media outlet Caixin. Regulators also met in recent days to discuss liquidity problems at the Bank of Jinzhou, Reuters reported.
What is interesting is the contrast with Baoshang Bank, whose takeover originally sparked the debt market flare-up in June. When regulators first said they were taking control, they were explicit that, retail deposits aside, only liabilities of 50 million yuan ($7.2 million) or less would be fully guaranteed without question. Chinese money markets promptly panicked.