Grace Wu, head of Greater China bank ratings at Fitch Ratings, discusses China’s banking sector and the support the sector gets from the government. She speaks on Bloomberg Television.
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Transcript
Although we did see Bolt and Bank, for example, was one of the examples of financial institutions that were allowed to fail in China. D.C. regulators paying a lot more attention this time given what’s going on overseas. If we look at what’s happened within the China regulatory landscape since 2017,
For example, that actually has been quite a lot of regulatory efforts in pushing forward financial reform to address somewhat the contagion risk at these smaller Chinese banks. For example, we talked extensively about the risks with smaller Chinese bank than whether it relates to their off balance
Sheet exposure or the fact that at some point for some of these smaller Chinese banks, it was possible that up to 40 or 50 percent of their assets were invested in investments. And that, of course, would increase contagion risk if there was stress within the financial system.
But with the reduction in some of these off balance sheet financing, shadow financing activities in recent years, we feel that this risk has subsided for China. Also, more importantly, we do see more examples of pre-emptive regulatory intervention from mainland authorities, and that also helps restore market confidence.
We have seen some of these signs that potentially they’re preparing for the possibility of needing bailouts, the building of the Financial Stability Fund, the encouraging of provincial governments on these bond issuances to to recapitalize smaller banks. How much of a turnaround is this, given
That there’s been a lot more focus on, you know, the avoidance of moral hazard of of market discipline over the last few years? What the size of the deposit insurance scheme in China is still relatively small. So India, plenty of distress. We still expect the D state to come in and provide support.
And so far, when we look at the competitive landscape in China at the moment, indeed, Deej Small, no Chinese banks are finding it increasingly difficult. Whether it’s because of asset quality pressure from properties, for example, the smaller banks tend to have a narrower geographical focus. So for those that operate in lower tier
Cities, they will be under greater asset quality pressure and also profitability. And that, of course, flows through into the capitalization. Much of the recent changes with regards to the proposed new capital rules and also aiming to centralize some of the regulatory power that really is aimed to
Reduce inconsistency within the sector. And in that purpose, you know, hoping to improve the comparability and also also the supervision for all banks within the system. You mention about more regulatory oversight recently coming from Beijing. Tell us a little bit about how that’s
Impacted some of your views of the smaller lenders that we talked about and perhaps even the bigger ones. By and large, the banking system, commercial banks, basically it is a confidence model. Right. You can’t have banks functioning properly if people do not believe in the
Viability of the banks. And so I think a lot of the regulatory reform really is aimed at reducing systematic contagion, miss. It is aimed to improve governance and also transparency within the sector. And these trends, you know, if proved to be sustainable and indeed, if the
Execution of these reforms result in a better disclosure, then that could be potentially created positive to how we view the operating environment for Chinese banks.
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Where are the $ trillions of loans for the failed Belt and Road projects , on the Chinese bank balance sheets ?
Do we have real good data on the real valuation of Chinese banks balance sheets ??
ㅋㅋㅋㅋㅋ
DO THE MATH ONE OF SIMPLE DYNAMCIS WHY GOLD PRICE IS GOING UP THAT FOR EXAMPLE) TODAY US WEEKELY JOBLESS CLAIMS WILL BE AGAIN UNDER +200K MEANS —— > MORE US T – DEBT YIELDS HAVE NO OTHER OPTIONS BUT TO HIKE MEANS —— > MORE BANKING SYSTEM'S INSTABILITY —— > FURTHER WEAKNESS OF US$ + US T – DEBT = MORE AND MORE GOLD + ENERGY PRICES HIKING AS SAFE HAVEN ASSETS AGAINST CURRENCY + BONDS + STOCKS!!!!!!!!!!!:)
AS A MATTER OF FACT THAT NOW IN USA CHINA EUROPE + JAPAN ECONOMIES HAVE MORE AND MORE AND MORE AND MORE AND MORE M3 SUPPLY PROBLEMS MEANS THERE WILL BE MORE AND MORE AND MORE AND MORE BANKING SYSTEM'S FAILURES FROM TOOOOOOOOOOOOOOOOOOOOOOO MUCH DEBT AGAINST TOOOOOOOOOOOOOOOOOOOO CHEAP MONEY PRICES(= INTEREST RATES)!!!!!!!!!!!!!!!!!!!:)
CHINA ITS DEBT TO GDP RATIO WILL BE HITTING TO THE LEVEL OF +1000% +/- 10% BY THE END OF 2030YR FROM WHERE IT IS NOW AT + 560% +/- 5 IN 2022YR!!!!!!!!!!!!!!!!!!!!!!!!!!:)
AGAIN AND AGIAN DO THE MATH IT IS TOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO LATE TO FIX THE FINANCIAL ENGIEERING PROBLEMS TO REDUCE TOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO MUCH DEBT IN CHINA(+H.K) ECONOMY BASED ON TOOOOOOOOOOOOOOOOOOOOOOOOOOO LOW INTEREST RATES!!!!!!!!!!!!!!!!! MEANS ——- > MORE AND MORE AND MORE AND MORE DEBT PROBLEMS ARE MOUNTING AND MOUNTING AND MOUNTING AND MOUNTING IN THE ECONOMY EVEN BASED ON ITS TOOOOOOOOOOO FASTLY GOING ON ITS DEMOGRAPHIC CHANGING!!!!!!!!!!!!!!!!!!!!!!!!!!!!:)
THERE WILL BE MUCH MORE DEBT PROBLEMS HURRICANING THE ECONOMY!!!!!!!!!!!!!!!!!!!!!!!:) AGAIN AND AGAIN GOLD HAS NO DEBT!!!!!!!!!
Chinese banks cannot and will not fail
P.S CHINA BANKING SYSTEM IS DEAD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! NOT EVEN WORTHY TO TALK ABOUT IT ANYMORE UNDERSTAND?!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:) AGAIN AND AGIAN DEAD IS DEAD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:) NOW THERE IS NO PROBABILITY AT ALL TO REDUCE ITS TOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO MUCH DEBT PROBLEMS BUT GOING TO NATIONAL DEFAULTS JUST LIKE ARGENTINA VENEZUELA ETC!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:) NO WAY TO RETURN NO PROBABILITY IN THE CHINA BANKING SYSTEM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:)
P.S YOU KNOW WHY? I'VE KEPT SAYING THAT 'YEN' WAS STILL IN A GOOD TIMING TO GO MUCH APPRECIATED AGAINST OTHER CURRENCIES ESP US$ BITCOIN POUND EURO STOCKS BONDS CHINA YUAN (+H.K$) SINCE THE END OF 3RD OF 2022YR BUT IT WAS BEFORE STARTING COLLAPSE OF THE BANKING SYSTEM AND NOW ——- > JAPAN IS LOSING A HUGE TIMING TO GET APPRECIATED FURTHER FROM HERE THAT AGAIN ——– > JAPAN YEN'S SAFE HAVEN ASSET WILL BE GONE TOO UNLESS BOJ IMMEDIATELY CHANGES ITS YCC RIGHT NOW!!!!!!!!!!!!!!!!!!!!!!!!!:) ———— > BECAUSE THERE WILL BE MORE AND MORE AND MORE FAILED BANKS RISING ON THE SURFACE THIS YEAR BETWEEN JUNE – SEP OF 2023YR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:)
AGAIN AND AGAIN AS I'VE SAID MANY TIMES ALREADY THAT GOLD + ENERGY PRICES HAVE NO OTHER OPTIONS BUT TO HIKE INTO THE HIGHEST EVER THEIR PRICE RANGE SINCE THE GOLD + ENERGY TRADING HAS STARTED IN HUMAN HISTORY!!!!!!!!!!!!:) < ——– WHY? BECAUSE THERE WILL BE MORE AND MORE AND MORE AND MORE AND MORE CURRENCIES BUBBLES HITTING THE ENTIRE ECONOMY EVEN UNDER +2% +/- WORLD GDP GROWTH FOR THE NEXT DECADE MEANS EVEN AFTER 2030YR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:)
AGAIN AND AGAIN AS I'VE SAID THAT WE ARE SEEING THE END OF US$ BITCOIN CHINA YUAN (+H.K$) EURO POUND STOKCS BONDS REAL ESTATE SECTORS THAT AGAIN ONLY GOLD + ENERGY ARE THE SAFE HAVEN ASSETS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:) YEN IS ALSO LOSING ITS GOOD TIMING SO FASTER THAN MARKET'S EXPECTATIONS NOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:)
How is svb 😂
breaking down china's banking system – extremely well regulated and sound – with very limited exposure to western institutions, investment products and derivatives.
breaking down the west's banking system – overleveraged to the sky, a house of cards with all the banks technically insolvent with massive counterparty risk – will result in the biggest implosion in the history of mankind and wipe out most western countries.
now stop your propaganda.
lmao.
looks like china have a lot of svb's
Never trust or invest in the CCP in China and their corporations or debt.
Breaking down China's banking system: can of worms