http://www.bloomberg.com/news/2011-07-05/china-bank-outlook-may-be-souring-on-local-government-loans-moody-s-says.html
Chinese banks’ loans to local governments may be 3.5 trillion yuan ($540 billion) more than estimated and the outlook for the industry is potentially turning negative, Moody’s Investors Service said.
The report may stoke concerns that as much as 30 percent of the local government financing vehicles’ loans may sour and become the biggest contributor to banks’ bad debts. China’s audit office last week reported that local governments had 10.7 trillion yuan in liabilities at the end of last year with 79 percent being bank loans.
Chinese banks’ loans to local governments may be 3.5 trillion yuan ($540 billion) more than estimated and the outlook for the industry is potentially turning negative, Moody’s Investors Service said.
The report may stoke concerns that as much as 30 percent of the local government financing vehicles’ loans may sour and become the biggest contributor to banks’ bad debts. China’s audit office last week reported that local governments had 10.7 trillion yuan in liabilities at the end of last year with 79 percent being bank loans.
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