Friday, 9 August 2013

Prepping for a bank bailout in China | FT Alphaville

Prepping for a bank bailout in China | FT Alphaville:

"A very intriguing little exclusive from Reuters on Friday:

(Reuters) – China is developing a new trading platform to enable banks to sell off loans to a wider range of investors, in a move that could pave the way for a government bailout of lenders or distressed asset sales to private investors.
The trading platform, now in the testing phase, is designed to introduce banks to a new class of investors, including non-bank financial institutions and large companies.
Currently, the lack of well-established precedents for asset disposals effectively leaves banks only two options: sell non-performing loans in private deals, mostly with big state-backed asset management firms, or keep rolling them over indefinitely to avoid booking a loss."

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