Provinces prop up fragile banks

Aerial view of the Evergrande Metropolis complex in Huaian, Jiangsu: the heavily indebted construction group can still stave off liquidation until the end of January.

Last year, China increased aid for regional banks and issued earmarked bonds worth a record 28 billion euros to stabilize small lenders in the real estate crisis.

Last year, the Chinese provinces pumped a record sum of 218.3 billion yuan (around 28 billion euros) into fragile regional banks through special-purpose bonds. This was reported by the Financial Times. Data from the Chinese financial data provider Wind shows that sales of bonds, which are intended to strengthen the capital buffers of regional lenders, more than tripled compared to the previous year.

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