Mar
29
China’s Large Banks Wary on Li Keqiang’s Plan for Bad Loans
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Higher risk weights for equity stakes would weaken banks
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Premier Li plans to use swaps to cut leverage, defuse risks
China’s proposal to deal with a potential bad-loan crisis by having banks convert their soured debt into equity is meeting with unexpected resistance from some of the biggest potential beneficiaries of the plan — the country’s large banks.
Asked about the plan at the Boao Forum last week, China Construction Bank Corp. Chairman Wang Hongzhang said he needs to think of his shareholders and wouldn’t want to see a plan that simply converted “bad debt into bad equity.”…
China’s Large Banks Wary on Li Keqiang’s Plan for Bad Loans
