China’s government is drafting rules to help manage the fallout of any bank failure, two people with knowledge of the matter said, as lenders in the country face rising loan defaults and increased competition.
Chinese Premier Li Keqiang’s plan to introduce deposit insurance is meant to comfort the nation’s savers as bad loans mount. In the bond market, it’s fueling speculation he’s preparing to let some banks collapse.
The Shanghai Stock Exchange said it’s “basically ready” to let foreign issuers sell stock, paving the way for companies from HSBC Holdings Plc to Coca-Cola Co. to list in the world’s second-biggest equity market.
China’s banking regulator ordered some of the nation’s smaller lenders to set aside more funds to avoid a cash shortfall, three people with knowledge of the matter said, signaling rising concern that defaults may climb.