DailyPressdotcom
Nouriel Roubini said some time ago that 30% of Chinese bank loans
will become non-performing, which will shake the foundation of the
banking system in China.
Well, it seems that he knew what he was saying,
unfortunately. According to a report by PriceWaterhouseCoopers cited by
ZeroHedge, matured and overdue loans reached 489 billion yuan ($77.6
billion) at the end of the second quarter of this year.
At the end of 2011, these loans, likely to become overdue, was only
112.9 billion yuan ($17.8 billion), which means that in just six months,
the amount of overdue loans increased by 333%. These loans can not yet
be declared bad because the definition of bad loans takes into account
credit and interest overdue for more than 90 days and/or where judicial
proceedings have been initiated against the operation or the debtor.
Even if they can not be considered non-performing loans (NPL), the
enormous growth of these loans is dangerous because it is the first and
biggest sign that China’s financial system is on the verge of a major
earthquake.
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