Chinese local governments provide capital boost to struggling banks amid property crisis

<p> Local governments in China have been injecting into capital into struggling smaller banks, seeking to contain spillover risks from a deepening property crisis and only slowly recovering economy.</p><ul><li>Local govmts have sold record amounts of Special-purpose bonds this year</li><li>Special-purpose bonds are a form of off-budget debt financing used by local governments in China</li><li>Local governments plan to use the proceeds of the latest bond sales to purchase equity or convertible bonds from smaller banks, most of them state-owned, effectively recapitalising them</li><li>have raised 152.3 billion yuan (US$21.05 billion) via such bonds so far in 2023</li></ul><p> Info comes via Reuters,<a href="https://www.reuters.com/markets/rates-bonds/debt-laden-chinas-local-governments-scramble-rescue-small-banks-with-21-bln-2023-11-28/#:~:text=BEIJING%2C%20Nov%2029%20(Reuters),crisis%20and%20a%20sputtering%20economy." target="_blank" rel="nofollow"> link here </a>for (much) more</p>

This article was written by Eamonn Sheridan at www.forexlive.com.