China requires Detroit-style bankruptcy

China requires Detroit-style bankruptcy

China actually requires letting local authorities take responsibility for their funds, including permitting bankruptcies, as part of a vigorous effort to have their debt risks defused. That’s what a major bank official unveiled on Monday.

Apparently, major government control of the scale of local government bonds needs to be removed, while responsibility to issue and also repay bonds needs to be strictly held by the city or county, which will actually employ the finances. That’s what the head of the People's Bank of China's research bureau, Xu Zhong told in an editorial on the financial news site Yicai.

At a gathering this week the country’s top leadership decided to take strict measures to strengthen the regulation of local government debt in 2018 as policymakers are considering reining in a huge debt pile and also reducing financial risks facing the national economy.

China’s government requires clarifying responsibility because it actually explores a bankruptcy system for local authorities, as Xu stressed, because there’s still a hope that the major government is going to bail out those running into fiscal issues.

Similar

Popular

Asian shares tumble with Japan markets shut

On Monday, stocks in Asia declined with markets in Japan unavailable for a holiday and traders watching oilfield-related stocks after a bankruptcy filing by Singapore's Ezra Holdings…

Greenback surges as yields soar

On Friday, the evergreen buck added against the Japanese yen and euro, drifting away from recent minimums, though revenues were capped as traders focused on a showdown between Donald Trump and members of his own party as for a fresh healthcare bill…

Deposit with your local payment systems

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Internal error. Please try again later

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera