The Chinese government unveiled a scheme to use US$45 billion from its foreign exchange reserves to bail out two of China's largest banks. Bank of China and China Construction Bank will receive the injection of cash to boost their capital adequacy ratios and move from absolute state ownership to become joint-stock holding banks after an eventual listing, according to state media.
Under the reform scheme, the two banks would restructure their assets, increase their capital adequacy ratios and address nonperforming loans. According to Chinese media the cash injections would not be used to pay off nonperforming loans.
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