Gansu Bank bailout – the beginning of a trend?

CHINA ADVISORY - Report 17 Apr 2020 by Andrew Collier

The PBOC is reportedly going to conduct a state takeover of the provincial Gansu Bank. The plan involves a massive capital injection through the sale of new equity to existing shareholders, including the provincial government, according to reporting by Caixin Magazine. We attempt to resolve two questions. First, why this bank? And second, does this suggest a state bailout of regional banks in general? Is the banking system due for a collapse? The bottom line is there is a problem but it may not lie with the banks themselves.

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