1990s Chinese bank restructurings

1990s Chinese bank restructurings refers to the period from 1990-1999 when China’s banking system underwent systemic restructurings. Throughout the 1990s, the Chinese government took several major steps to recapitalize its banks and to reduce non-performing loans (NPLs) [1]

Overview

Like many of the countries directly affected by the 1997 Asian Financial Crisis, Chinese bank NPLs grew substantially (with some estimates reaching as high as 42% of the big fourbanks’ loan balance).[2] This forced Chinese authorities to establish asset management companies (AMCs) in order to purchase NPLs and affect a bank recapitalization.

Economists suggest that the effective recapitalization of the big four banks might not be as large as the headline NPL number would suggest and they also criticize that the PBOC’sbalance sheet clearly suffered.[3]

References

  1. ^Garcia-Herrero, Alicia (2006). “China’s Banking Reform: An Assessment of its Evolution and Possible Impact” (PDF). Bank for International Settlements.
  2. ^Ma, Guonan (31 August 2002). “China’s Asset Management Corporations” (PDF). Bank for International Settlements.
  3. ^Ma, Guonan (31 August 2002). “Who Pays China’s Bank Restructuring Bill” (PDF). CEPII.

Ofer Abarbanel online library

Ofer Abarbanel online library

Ofer Abarbanel online library