Inside China: the AMC experiment

Author: | Published: 24 Feb 2014

The government has set up asset management companies to reduce risk in the country’s banking system. But can they enhance value in distressed businesses?

These days it is good to not be a bank. Take, for example, Dodd-Frank, Basel III and its implementing legislation in Europe, plus the baggage of scandals and allegations arising from the use of house money to fund dubious activities in the rates, commodities, credit, information arbitrage and so-called connection markets. These are pressuring US and other western banks to fundamentally change activities at the operating, treasury and legal levels of their business - at least in their home and other highly regulated host jurisdictions. At the same time, despite having charmed markets for a period of time, Asian (and notably Chinese) banks are now facing blowback from the effects of tapering by various central banks and, particularly in the case of China, an avalanche...