Taskforce Will Watch Chinese Involvement with U.S. Subprime Investments
- Jan 23, 2008
Beijing–The China Banking Regulatory Commission has created a taskforce to monitor Chinese bank’s exposure to the U.S. subprime market, according to the Financial Times.Senior officials told the Times that China’s banking regulator, headquartered in Beijing, created the group to investigate and issue a monthly report about what subprime holdings China’s largest banks have as the country braces for potentially larger-than-anticipated subprime losses.It seems, however, China’s lenders will not see the same impact from subprime holdings as the Western world has. The Bank of China–the largest U.S. subprime security holder in Asia–said Tuesday it would see losses on more holdings than it had forecast but would still show a record annual profit growth for last year.Although the bank hasn’t announced definitive losses, some analysts have estimated the amount could be as much as $4.8 billion.The two other Chinese banks–Industrial and Commercial Bank of China and China Construction Bank–that have considerable subprime holdings said late in 2007 that they had total exposures of $1.23 and $1.06 billion. Analysts estimate the banks will likely have to make provisions for 30 to 40 percent of the holdings, according to the Times.