Fitch Warns Of Growing Risks to China's Bank System

While aggressive lending powers China's economy, it raises the risk of nonperforming loans, says the New York Times.

 

Quoting credit ratings agency Fitch, the Times says many banks could face sizable risks if borrowers failed to repay loans. In a report, Fitch finds that Chinese banks are increasingly making complex deals that hid the size and nature of their lending, masking a coming wave of  bad loans.

 

Charlene Chu, a Beijing-based banking analyst at Fitch, told the Times that the practice of repackaging loans and moving them off bank balance sheets "is one of the most disconcerting trends we’ve seen in China in recent years.”

 

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