‘Ordered banks to transfer off-balance-sheet loans onto their books’
Lifted from comments in open thread by reader sgetz99:
August 10 – Bloomberg (Jungmin Hong and Saeromi Shin): “China’s banking regulator ordered banks to transfer off-balance-sheet loans onto their books and make provisions for those that may default… The assets linked to wealth management products provided by trust companies must be shifted onto banks’ balance sheets by the end of 2011″
I wish our regulators had the power and were capable of making such s smart decision. If China can avert a large part of the fallout from an inevitable credit contraction, it will be a testament to what an important role regulation can play when its not copted by the players in the game.
The way we do it is eliminiate mark-to-market accounting so the balance sheets look pretty and solvent. This helps banks do secondary stock offerings at a better price and shore up “capital”. The new and improved pretty books also freed up the money for another stellar bonus year on Wall Street !
Isn’t American Capitalism wonderful!
Too bad we don’t do in this country what they do in China, they shoot the perps. That whould clean up the majority of the mess we face today.
uh, U.S. regulators most certainly have the power to do the exact same thing. Look up the SEC, FDIC, Office of Comptroller, etc. etc.
Western neo-liberal economists have consistently underestimated China for a very long time. The reason being, they don’t believe in regulation, state investment, or state control of banking. Which all seems to be working pretty well in China’s case.