Chinese banks are now vanishing

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via MSN:

The Chinese banking sector is facing a severe crisis. In just one week, 40 banks disappeared, and the collapse of Jiangxi Bank has further deepened the sector’s problems. Experts warn that the situation could have severe consequences for the global economy.

Reports from China indicate the collapse of one of the banks. The portal renminbao.com published a report from outside the headquarters of Jiangxi Bank, which concerned clients stormed over bankruptcy rumors. The bank had previously informed that its profits could drop by 30% due to customers’ loan repayment issues.

China’s growing problems with banks
The Economist described the situation in the Chinese banking market. It was noted that approximately 3,800 banking institutions were threatened in China. Their assets are 55 trillion yuan ($7.5 trillion), representing 13% of the country’s banking system. The magazine emphasizes that these banks have long been poorly managed and have accumulated vast amounts of bad loans.
The report states that many of them lent money to developers and local governments, exposing themselves to the impacts of the real estate market crisis. The authors note that in recent years, some banks have revealed that 40% of their portfolios are non-performing loans.

Disappearing banks and attempts to rescue the sector
The rare disclosure of a bank’s problems may underscore the seriousness of the situation. A similar mechanism was observed with developer companies. Little was heard about the giants’ problems until the authorities eventually confirmed an issue affecting the entire industry.

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