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> A major Taiwan newspaper with anti-Beijing leanings is reporting that nearly 40 banks have disappeared in recent days, merging with larger institutions, and t

by gs17 2y ago

> A major Taiwan newspaper with anti-Beijing leanings is reporting that nearly 40 banks have disappeared in recent days, merging with larger institutions, and that as many as 3,800 banks are in varying levels of trouble. 40 banks disappearing is really not much (unless you had money at that bank) given the scale the same sentence implies. Looking it up, 40 is less than 1% and these are small banks. I'd presume this isn't that big a deal.

nyokodo 2y ago
> 40 banks disappearing is really not much If the failures are small, previously common, and at a manageable rate that isn’t accelerating then this could be a temporary blip. If the failures are larger, previously rare, and occurring at an accelerating rate then this could be the start of a Chinese banking collapse.
- hakfoo 2y ago
  Having a bunch of institutions wind up at once sounds like the results of a stress test finally came back, so they now knew exactly who needed to have their plug pulled. This seems like it also differentiates the "financial economy" from the "real economy". The borrowers continue to pay the new owner, the depositors are made whole, and actual productive enterprises continue to tick on. The only ones punished were the investors who took a risk on bank management that wasn't doing an adequate job of managing risk. That feels like what SHOULD be happening. Endless bailouts have distorted the risk mindset of banks, and letting them fail should help restore discipline.
- londons_explore 2y ago
  > start of a Chinese banking collapse. I don't really see how this is possible. If the government didn't want a collapse to happen, they can always print more RMB and loan it to the struggling banks on 'pay it back in 100 years' type terms and kick the can down the road till it isn't a problem anymore.
halJordan 2y ago
While idk about the politicality of the paper, there is absolutely an ongoing cull of banks in China. That is not political. Inferring some big doom would be. They are mostly rural and small banks. The problem being the same problem of say isps in America. None of the major banks can make an honest attempt at service because there's just no money in it. The "hope" is that these small banks are failing and the big banks buying up which will solve the dualing problems of small banks being vulnerable and big banks not having presence. But thats a pretty aspirational take.
dghlsakjg 2y ago
Losing 1% of your banks in a few days is not normal. China’s government stepped in and corrected big during the Evergrand thing, but it isn’t a big secret that China is super leveraged into junk real estate. The complete lack of transparency makes it super hard to tell what is rumors, but it wouldn’t be a huge surprise to see a major correction in China.
- mikhael28 2y ago
  It is in China. They don’t have an organic drip drip of failure. It’s all closely coordinated - it would be weirder if they have one or two fail, then next week 4, then 5 the week after. It would be a huge surprise to see a major correction.

by gs17 2y ago

nyokodo 2y ago

> 40 banks disappearing is really not much If the failures are small, previously common, and at a manageable rate that isn’t accelerating then this could be a temporary blip. If the failures are larger, previously rare, and occurring at an accelerating rate then this could be the start of a Chinese banking collapse.

hakfoo 2y ago
Having a bunch of institutions wind up at once sounds like the results of a stress test finally came back, so they now knew exactly who needed to have their plug pulled. This seems like it also differentiates the "financial economy" from the "real economy". The borrowers continue to pay the new owner, the depositors are made whole, and actual productive enterprises continue to tick on. The only ones punished were the investors who took a risk on bank management that wasn't doing an adequate job of managing risk. That feels like what SHOULD be happening. Endless bailouts have distorted the risk mindset of banks, and letting them fail should help restore discipline.
londons_explore 2y ago
> start of a Chinese banking collapse. I don't really see how this is possible. If the government didn't want a collapse to happen, they can always print more RMB and loan it to the struggling banks on 'pay it back in 100 years' type terms and kick the can down the road till it isn't a problem anymore.

halJordan 2y ago

While idk about the politicality of the paper, there is absolutely an ongoing cull of banks in China. That is not political. Inferring some big doom would be. They are mostly rural and small banks. The problem being the same problem of say isps in America. None of the major banks can make an honest attempt at service because there's just no money in it. The "hope" is that these small banks are failing and the big banks buying up which will solve the dualing problems of small banks being vulnerable and big banks not having presence. But thats a pretty aspirational take.

dghlsakjg 2y ago

Losing 1% of your banks in a few days is not normal. China’s government stepped in and corrected big during the Evergrand thing, but it isn’t a big secret that China is super leveraged into junk real estate. The complete lack of transparency makes it super hard to tell what is rumors, but it wouldn’t be a huge surprise to see a major correction in China.

mikhael28 2y ago
It is in China. They don’t have an organic drip drip of failure. It’s all closely coordinated - it would be weirder if they have one or two fail, then next week 4, then 5 the week after. It would be a huge surprise to see a major correction.