Bad Loans Archives - MacroPolo


Bad Loans
Bad Banks
November 28, 2018

At the end of 2017, China’s market for nonperforming loans (NPLs) was a bubble. Asset management corporations (AMCs) and investors were willing to pay huge price premiums for banks’ bad loans. The president of China Great Wall Asset Management Co., Zhou Liyao, attributed the bubble to a period of “irrational exuberance.”[1] But a better explanation is that prices were inflated… READ MORE

Bad Loans
March 12, 2018

On the face of it, China’s banks look remarkably robust. By international standards, China’s nonperforming loan (NPL) ratio is still incredibly low. After gradually rising since 2012, the NPL ratio peaked at 1.76% outstanding loans at the end of September 2016, before leveling off at 1.74% where it has remained ever since. At 1.74%, it is roughly in line with… READ MORE