A stress test by China's central bank showed the banking system can weather big increases in bad debts or a sharp economic slowdown, but some analysts were sceptical about the findings aimed at shoring up investor confidence. Concern about huge growth in Chinese corporate debt since the global financial crisis and the risk of defaults has intensified this year as growth slows and authorities allow markets to play a bigger role in deciding winners and losers. "The results of the stress test showed that the asset quality and capital adequacy of China's commercial banks is relatively high," the People's Bank of China (PBOC) said in its annual financial stability report released on Tuesday. The central bank carried out stress tests at the end of last year for events such as a 400 percent rise in non-performing loans (NPLs), increases in bond yields, large changes in the yuan's exchange rate, and economic growth slowing to 4 percent.
via Business News - Yahoo Finance http://ift.tt/1mbRMhQ
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