SHOCK REPORT: 40 Chinese Banks VANISH IN ONE WEEK, marking severe consequences for the global economy.

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  • Background:
    • China’s regulators have been implementing reforms and consolidations for years.
    • Since 2019, several mid-tier banks have collapsed, and powerful investment managers and state financiers have faced challenges.
    • However, small rural banks pose the most complex problem.
  • Recent Developments:
    • In the week ending June 24th, 40 Chinese banks vanished as they were absorbed into larger institutions.
    • These smaller banks encountered similar issues as American banks during the savings and loan crisis in the mid-1980s.
  • Comparison to the U.S. Savings and Loan Crisis:
    • The S&L crisis in the U.S. was triggered by aggressive lending growth, poor risk controls, and a property downturn.
    • Over 1,000 small lending institutions collapsed or merged during that period.
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Source:

https://www.straitstimes.com/opinion/why-chinese-banks-are-now-vanishing


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