China Faces Banking Crisis After $2 Trillion Mountain of Toxic Debt Exposed
Statistical rating agency Fitch has estimated that China may face a massive banking system crisis, as the number of China’s toxic loans may be ten times higher than Beijing says.
According to the agency’s Tuesday report, up to 21 percent of China’s loan pool is “non-performing loans,” (NPLs) which means debtors are struggling to make the repayments. At the same time, only 1.8 percent of loans were classified as bad ones by state authorities last June.
Moreover, Beijing’s reliance on credit growth for providing near-term GDP increase could exacerbate existing problems, Fitch stressed, as it “will increase the size of asset-quality problems in the financial system.” – READ MORE