China warned by IMF over fragile banks
(22 May 2013 – China) The International Monetary Fund (IMF) has warned China over its fragile banks, fearing they are incapable of withstanding multiple crises.
IMF released a report saying China’s banks are strong enough to support isolated crises, but incapable of overcoming a crisis derived from overexposure to credit, housing bubbles and the currency values.
The IMF report is based on stress tests carried out on 17 Chinese banks, which account for 83 percent of the commercial banking system.
Reduced growth and a housing bubble will lead to a credit crisis similar to that afflicting the United States and that caused the present global crisis, according to the IMF.
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