REF : Financial Times
"China has instructed its banks to embark on a mammoth rollover of loans to local governments, delaying the country’s reckoning with debts that have clouded its economic prospects"
See link :
. http://www.ft.com/cms/s/0/dc7035dc-553b-11e1-b66d-00144feabdc0.html#ixzz1mBnrfsRl
The judgement is that the risk of local government (which probably means municipal rather than provincial government) defaulting is greater than the risk of the banks getting into trouble; it may be easier to prop up the banks. One of the main exposures of municipal government is investment in land and property. Perhaps the asset bubble is about to pop?
ReplyDeleteHi, I can't see there being a problem @ Govt Level. We will never know the truth.
ReplyDeleteAgreed it is easier to prop up the banks.
That is where we will be told the problem is.
Can't see it being a problem with Assets.