And so it begins. Will the PBOC be the first central bank to lose control of the insane debt & credit bubbles they’ve created?
Thousands of desperate depositors in China have been fighting for almost two months to recover their savings after a bank run that has raised concerns over the financial health of the country’s smaller lenders.
Authorities blamed fraudulent management practices for the crisis, which was sparked by the sudden suspension of cash withdrawals at four lenders in Henan, one of China’s most populous provinces, on April 18.
But analysts said an economic slowdown sparked by President Xi Jinping’s zero-Covid policy is also worsening the problems at China’s smaller banks.
The withdrawal problems at Yuzhou Xinminsheng Village Bank, Shangcai Huimin County Bank, Zhecheng Huanghuai Community Bank and New Oriental Country Bank of Kaifeng have prompted rare street protests by angry depositors, many of whom said their life savings were at stake.
“They’re supposed to be bank savings backed by sovereign creditworthiness,” said a depositor surnamed Xu who had saved a total of Rmb93,000 ($13,900) at three of the four troubled lenders. “Now you tell me they’re all gone, I feel nothing but furious.”
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