IMF staff weigh options for tackling Chinese NPLs
Technical note considers how securitising NPLs or converting them to equity might work in China
It is "critical" that plans to convert non-performing loans (NPLs) in China to equity, or to securitise them, are designed in the "right" way, a technical note published by the International Monetary Fund argues.
The stock of NPLs held by Chinese banks is rising. The China Banking Regulatory Commission (CBRC) estimates 1.67% of all loans were non-performing as end-2015, which equates to 1,274 billion yuan ($197bn) – up from 1.59% the previous quarter.
Local media reports suggest the authorities
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