{"id":28663,"date":"2017-12-08T07:45:44","date_gmt":"2017-12-08T12:45:44","guid":{"rendered":"http:\/\/olduvai.ca\/?p=28663"},"modified":"2017-12-08T07:45:44","modified_gmt":"2017-12-08T12:45:44","slug":"imf-stress-tests-find-280-billion-black-hole-in-chinese-banks-capital","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=28663","title":{"rendered":"IMF Stress Tests Find $280 Billion Black Hole In Chinese Banks’ Capital"},"content":{"rendered":"

IMF Stress Tests Find $280 Billion Black Hole In Chinese Banks’ Capital<\/a><\/h3>\n
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The IMF released a new analysis on the instability<\/span> stability of the Chinese financial system.<\/strong> Speaking to the media in an online briefing, some of the insights from Ratna Sahay, deputy director of the IMF\u2019s Monetary and Capital Markets Department, hardly advanced our knowledge much.<\/p>\n

Sahay noted that \u201cRisks are large. Having said that, the authorities are really aware of risks and they are working proactively to contain these risks.\u201d <\/em><\/strong><\/p>\n

That\u2019s why the authorities are finally racing to contain the worst excesses of China\u2019s insane credit boom following October\u2019s Party Congress, for example overhauling the $15 trillion shadow banking and asset management sector. As we noted<\/a> on the latter, the new measures don\u2019t take effect until the end of June 2019, no doubt reflecting the enormity of the problems uncovered by Chinese regulators.<\/p>\n

Sahay pointed to three main risks: credit growth, the complex and opaque financial system and implicit guarantees which \u201cencourage excessive risk-taking\u201d (think WMPs). <\/em><\/strong><\/p>\n

However, the IMF does a better job in explaining why a massive financial crisis in China is all but inevitable \u2013 the conflicting needs of social stability versus financial stability. According to Reuters<\/a>.<\/p>\n

But the near-term prioritisation of social stability seems to depend on credit growth to sustain financing to firms even when they are non-viable, it said. \u201cThe apparent primary goals of preventing large falls in local jobs and reaching regional growth targets have conflicted with other policy objectives such as financial stability,\u201d the report said. \u201cRegulators should reinforce the primacy of financial stability over development objectives,\u201d the fund said.<\/p><\/blockquote>\n

Too late.<\/strong><\/u><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

IMF Stress Tests Find $280 Billion Black Hole In Chinese Banks’ Capital The IMF released a new analysis on the instability stability of the Chinese financial system. Speaking to the media in an online briefing, some of the insights from Ratna Sahay, deputy director of the IMF\u2019s Monetary and Capital Markets Department, hardly advanced our […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[130,17396,13010,6872,391,418,434,4318],"class_list":["post-28663","post","type-post","status-publish","format-standard","hentry","category-economics","tag-china","tag-chinese-bank-capital","tag-credit-growth","tag-financial-stability","tag-growth","tag-imf","tag-international-monetary-fund","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=28663"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28663\/revisions"}],"predecessor-version":[{"id":28664,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28663\/revisions\/28664"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=28663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=28663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=28663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}