"Having the smaller banks absorbed by the bigger ones, which seems to be Beijing's new strategy, will mean that China, like Japan in the 1990s, will be dominated by huge zombie banks," says Michael Pettis at China Financial Markets in a series of Tweets.
There are a handful of giants, and a few more medium-size banks that can also operate nationally.
Cracks are emerging at some small and midsize banks after years of rapid growth.
Smaller banks lent liberally to local governments and businesses, and bad debts are rising as China's economy sputters.
Many banks aren't profitable enough to boost capital through retained earnings.
The Fed and Central Banks brought this on by refusing to let zombie banks and corporations go under and insisting on cramming more debt into a global financial system choking on debt.
The central banks want to stop "Deflation".
https://moneymaven.io/mishtalk/economics/china-like-japan-in-the-1990s-will-be-dominated-by-huge-zombie-banks-c6PdF9UDckCvaTGrsoWA5A/
There are a handful of giants, and a few more medium-size banks that can also operate nationally.
Cracks are emerging at some small and midsize banks after years of rapid growth.
Smaller banks lent liberally to local governments and businesses, and bad debts are rising as China's economy sputters.
Many banks aren't profitable enough to boost capital through retained earnings.
The Fed and Central Banks brought this on by refusing to let zombie banks and corporations go under and insisting on cramming more debt into a global financial system choking on debt.
The central banks want to stop "Deflation".
https://moneymaven.io/mishtalk/economics/china-like-japan-in-the-1990s-will-be-dominated-by-huge-zombie-banks-c6PdF9UDckCvaTGrsoWA5A/
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