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Wednesday, 4 May 2016

Are China's Banks Too Big to Fail?


Another form of off-balance-sheet lending -- the practice of using trusts or asset management plans to extend credit -- could result in losses of as much as 1 trillion yuan ($154 billion), Commerzbank estimated in February. 




China's Coming Bank Bailout



China is setting the stage for a major bank bailout, potentially accompanied by a round of industry consolidation. On Saturday, Bloomberg News reported that the China Banking Regulatory Commission closed a loophole through which some nonperforming loans may have been leaving balance sheets. 
The regulator sent a notice last week requiring lenders to make full provision for any loan rights transferred to other financial institutions, which in many cases included their own wealth-management products. Yes, that's right. Banks created funds that went on to buy the right to receive payments for loans the lenders had made. Those advances then conveniently disappeared from the banks' books. If they soured, too bad.
The regulator's action means lenders can no longer evade responsibility for such loans.





The cuts have forced Binladin and other construction companies to delay paying some workers' salaries, in some cases for months. In response, some unpaid staff have stopped turning up for work, slowing work on some Binladin projects such as the King Abdullah Financial District in Riyadh. 



Rising deductibles and copayments can mean people don't get much benefit from paying monthly premiums. A recent study from the Kaiser Family Foundation shows deductibles rose about eight times faster than wages in the past 10 years. That's taking a toll on people like Powell, even though they have insurance.



Senior loan officers of nearly 100 banks acknowledged that credit quality has "deteriorated" on everything from auto loans and credit cards to commercial real estate mortgages. Translation: More people aren't paying and delinquencies are rising.




These Two U.S. Drillers Just Filed For Bankruptcy


 rotection , as crude oil prices hover just above $45 per barrel and financial woes take their toll. Oklahoma-based Midstates Petroleum Company and Texas based Ultra Petroleum have now filed for bankruptcy, citing combined debts of more than US$5.8 billion blamed on a long run of low commodity prices that have led to irreparable financial damage. Last year, Midstates Petroleum recorded a net loss of $1.8 billion, compared to net income of $116.92 million a year ago. The company operates in Texas, Louisiana and Oklahoma and produced 12 million barrels of oil equivalent in 2015. It owns assets worth around $680 million. According to the company, it reached a plan support agreement with a majority of its lenders for restructuring. As for Ultra Petroleum , the company had disclosed that it has a debt of nearly $4 billion against […]

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