China closes record number of banks as economic growth slows
China closed a record 670 banks last year, or nearly one in four lenders, as Beijing pushes to de-risk amid slowing economic growth.
China has closed a record 670 banks last year, with nearly all of them being rural institutions, as the country's slowing economic growth prompts Beijing to de-risk the banking system. According to Fitch, these closures primarily target the weakest part of the financial system, characterized by poor asset quality, low capitalization, and governance shortcomings.
The closures are also believed to be aimed at preventing potential liquidity events among small institutions, according to a Singapore-based expert. Despite China's recent technological advancements, such as electric cars, dancing robots, and choreographed drones, its economy has fallen short of projections, largely due to weak consumption, as reported by The Economist.
Brief written by urgent.news from Semafor's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
