Asia Pacific: Trouble ahead

Author: Karry Lai | Published: 8 Aug 2019

This month, the China Banking and Insurance Regulatory Commission (CBIRC) stepped in to take control of the Inner Mongolia-based Baoshang Bank as it posed serious credit risks. Chinese financial group Tomorrow Holdings, a key shareholder of Baoshang Bank, has been under investigation by Chinese regulators since the disappearance of the group's chairman Xiao Jianhua in 2017. The move has sparked concern over the health of smaller local banks across China, amid fears they suffer from a lack of internal controls and corporate governance.

The People's Bank of China (PBOC) and CBIRC will offer liquidity support to the bank and will guarantee all principal and interest of corporate deposits and interbank liabilities...