In 2018, regulators forced banks to recognise the bad debt disguised as special mention loans, resulting in Rmb1.75 trillion ($372.5 billion) hitting the market for bad debt sales last year, the highest level in 20 years.
The aim of such tight policy is to expose the problems at the banks to the regulators, because banks have been able to use various means to hide non-performing assets, said Wang Ke, a vice-president at Shanghai-based conglomerate Win Group, and an expert on Chinas provincial asset management groups.
Regulators are now shifting their focus to how local asset managers help disguise bad debt.
Asset managers controlled by local governments have been tasked with resolving some of the countrys massive bad debt load, but they als…
Read the full article at: https://www.afr.com/news/world/asia/china-banks-and-asset-managers-fined-for-masking-bad-debt-20190528-p51ryv