BIS Data Shows China Risk to Financial System

BIS Data Shows China Risk to Financial System
Chinese paramilitary policemen march outside the Bank of China headquarters in Beijing, China, on Feb. 25, 2016. AP Photo/Ng Han Guan
Valentin Schmid
Updated:

After market crises, it sometimes takes a while for the real picture to emerge, the reasons why Western stocks followed the Chinese currency down at the end of 2015.

So it is only now that we learn how much money international banks withdrew from China in the fourth quarter of 2015 and how this unwind of lending caused a liquidity squeeze, thanks to minute data aggregation from the Bank of International Settlements (BIS).

“The $114 billion decline in cross-border lending to China was the second quarterly drop in a row, and it pushed the annual growth rate down to –25 percent,” the BIS states in its quarterly review published this June.

The trend of lending to China has clearly turned. (BIS)
The trend of lending to China has clearly turned. BIS
Valentin Schmid
Valentin Schmid
Author
Valentin Schmid is a former business editor for the Epoch Times. His areas of expertise include global macroeconomic trends and financial markets, China, and Bitcoin. Before joining the paper in 2012, he worked as a portfolio manager for BNP Paribas in Amsterdam, London, Paris, and Hong Kong.
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