China: Potential bad debts are now reaching into the USD trillions - Rabobank

Sandeep Kanihama FXStreet Contributor

Michael Every, Head of Financial Markets Research at Rabobank, notes that Bloomberg reports that China’s potential bad debts are now reaching into the USD trillions (against a USD10.4 trillion GDP).

Key Quotes

“Worse, there is also a reference to off-balance sheet Wealth Management Products growing 73% y-o-y in 2015(!), the stacking of layers of WMP liabilities upon the same underlying (and under-performing?) assets, much like CDOs and CDOs-squared in the US pre-crisis, and that the scale of the problem is such that WMPs account for 40% of one mid-tier bank’s official balance sheet.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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