“To meet Beijing’s lending target, banks are forced to work with riskier borrowers.”
I’ve long argued that because real, sustainable demand is so weak, banks can only expand private sector lending by lowering lending standards and...
ft.com/content/2099c1… via @financialtimes
I’ve long argued that because real, sustainable demand is so weak, banks can only expand private sector lending by lowering lending standards and...
ft.com/content/2099c1… via @financialtimes
@FinancialTimes ...finding borrowers who either need to repay more expensive debt, buy back stock, speculate on real estate or other assets, or who are excessively optimistic about economic conditions and willing to take huge risks on someone else’s money. While some of this lending may end...
@FinancialTimes ...up creating productive assets, most of it will simply increase the riskiness of the system or get lost in ventures that don’t add to China’s net productive capacity, including projects that cannibalize other projects.
In the mid-2000s Beijing pressured banks to expand...
In the mid-2000s Beijing pressured banks to expand...
@FinancialTimes ...car loans, and sure enough car lending exploded, but within a few years nearly half of them were non-performing. Credit expansion should be driven by demand, not supply.
