BoA: China’s Debt Swap Is A Bad Idea
Caixin reported at the beginning of this week that the Chinese government may allow banks to swap Rmb1 trillion debt to equity over the next three years in what’s believed to be an attempt to help the country’s corporate sector deleverage.
According to a report on the topic from Bank of America Merrill Lynch, while this initiative may have been put in place with good intentions, it is another kicking-the-can-down-the-road program and may ultimately lead to more zombie companies, higher bad debts, a more fragile financial system greater pressure on the yuan in the long-term.
China Loans To Latin America Causing Alarm
Still, BoA’s analysts believe that despite the possible long-term negative...
Login required to continue reading.
Setup a free account to get access to this article (no credit card required).
View Full Article
