Media reports this morning claim the Bank of Jinzhou is in the process of being restructured by Chinese regulators and asset management companies of larger state-owned banks, becoming the next casualty of interbank market stress after the Baoshang Bank seizure on May 24. The reported takeover should permit a more orderly wind-down of the bank, without explicit haircuts to its depositors. The problem looming for Chinese authorities is that other banks are similarly vulnerable, but the regulators’ and larger banks’ capacity for multiple restructurings is still limited.
