What country does this describe?
The country’s banks are short of capital and will have to go to the financial markets to raise more this year — and in 2013.
Bank balance sheets have ballooned as a result of lending to real-estate developers.
Everyone believes that banks’ official accounts seriously understate the number of bad loans on their books.
And, finally, it’s just about impossible in this country to separate bank and government finances.
Spain or Italy? Of course. And you can work your way around Europe adding other names to the same list of guesses.
But the country I had in mind was China.
China’s banking problem isn’t as far along as those in Europe. Notice that I’m calling it a “problem” rather than a “crisis.” But China’s banking sector is headed toward a crisis — and the government’s efforts to head off that escalation will be a major driver in China’s economic and monetary policy this year and next.
Want to understand how much stimulus Beijing will pour on its economy — and therefore whether you should be putting money into Chinese stocks or taking it out (and when)? Take a long look at China’s banks.
Read more here:
If you enjoy the content at iBankCoin, please follow us on Twitter
