Chinese financial regulators took control of Baoshang in May 2019 due to serious credit risks
- The PBOC will now let it go into liquidation, the first such insolvency since 2001.
- PBOC says the bank is permitted to file for bankruptcy and liquidate any remaining assets
- The PBOC has allowed 2 other banks to to take over assets and operations on Baoshang
Via Reuters.
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Its a bit of a tricky time for the PBOC to allow this as the sector (the economy as a whole) struggles out of coronavirus impacts. The liquidation of this lender is likely to raise credit costs for similar small banks at the margin and may nudge a few of them closer to a similar fate.
