Many of the funds advanced and loans issued by Chinese
commercial banks and other lenders to the LGFVs are deemed to fail. (LGFV =
local government financing vehicles). If people start doubting the LGFVs’
credibility, we would see a cascading financial crisis in China, comparable to
the 2008 financial crisis in the US, as investors started withdrawing their
money from these organizations and the value of their bonds, loans and stocks
would crumble. Loans issued by banks are an important part of their assets and
their solvability is, in part, determined by the quality of their loan book; if
the LGFVs’ credibility collapses, China’s State-owned commercial banks would be
severely hit and the result could be a bank crisis. However, China is a
State-led command economy and all State-owned financial institutions, including
the People’s Bank of China, are responsible to the CPC which decides on
investments and defaults with the Chinese financial authorities taking care of
bad loans to solve the debt problem. There is no political reason why China’s
current debt problem should unravel as chaotically as we saw in the US and
Europe, it will be resolved according to the CPC’s wishes. China is in the
position that it can solve its debt crisis without harming ...
China’s central bank brought out an array of tools to target
stubbornly high financing costs this week, reducing interest rates, offering
cheap loans and adding cash to the financial system through open-market
operations...
Major U.S. stock exchanges and Barclays Plc on Wednesday won
the dismissal of nationwide litigation in which pension funds and other
investors accused them of rigging markets to benefit high-frequency traders...
Should the Federal Reserve worry about tanking stock
markets? One reason for calm is that they do not much affect household
finances. Just over half of Americans say they are invested in the stock
market, but their direct stock holdings are small, making up only 14% of
household balance sheets (see chart). That means the effect of this week's
stock market falls on household spending, and on the American economy, is
probably limited...
At a time when the oil price is languishing at its lowest
level in six years, producers need to find half a trillion dollars to repay
debt. Some might not make it. The number of oil and gas company bonds with
yields of 10 percent or more, a sign of distress, tripled in the past year,
leaving 168 firms in North America, Europe and Asia holding this debt, data
compiled by Bloomberg show...
Greek Prime Minister Alexis Tsipras faces the growing
challenge of warding off the disintegration of his Syriza party even before a
September election is called officially. Many lawmakers and party members
haven’t decided whether they will run...
Kyiv and pro-Russian separatists in its east have agreed to
end all violations to the peace deal that was signed in Minsk earlier this
year. Both sides blame each other for the ongoing violence...
Serbia and Kosovo reached agreement Tuesday (25 August) on
key issues for better relations between the two countries, and between Albanian
and Serbian people in Kosovo. The deal, brokered in Brussels by EU chief
diplomat Federica Mogherini, establishes strong local powers for Kosovo areas
with a Serbian majority...
Facing criticism from the Republican party on inviting
Chinese President Xi Jinping for a state visit next month, amid allegations of
cyber-attacks and human rights issues, the White House has said that engagement
with China is in the national interest of the US...
The US Air Force will “very soon” deploy F-22 fighters jets
to Europe, Air Force secretary Deborah James announced Monday (24 August) as
part of a plan to increase Nato presence near Russia, while A-10 tankbusters
arrived in Estonia on Saturday...
Presidents discuss creation of free trade zone involving
Eurasian Economic Union and also nuclear power plant in Egypt. Russian
President Vladimir Putin and his Egyptian counterpart Abdel Fattah el-Sisi have
pledged to further boost relations between the two countries at talks in
Moscow...
The EU could better protect itself from migrants if it had a
common army, Czech president Milos Zeman said Tuesday (25 August), while the
Czech finance minister, Andrej Babis, called for the closure of the Schengen
area’s external borders and for NATO help...
North and South Korea agreed early on Tuesday to end a
military standoff that sparked an exchange of artillery fire and had ratcheted
up tension on one of the world’s most heavily-fortified borders. Under an
accord reached in the early hours, following more than two days of talks, North
Korea expressed regret over the recent wounding of South Korean soldiers in
landmine blasts and Seoul agreed to halt anti-Pyongyang propaganda broadcasts...
President Recep Tayyip Erdogan on Wednesday urged Turkey to
vote for "stability" in 1 November polls, as three pro-Kurdish MPs
were invited into a caretaker government in an unprecedented move...
Meeting prompted by Maduro’s move to close two border
crossings and deport Colombians citing an attack by smugglers. The foreign
ministers of Colombia and Venezuela have promised to increase cooperation
following the closure of two major border crossings and a crackdown on migrants
and smugglers by Venezuela...
Israel launched an air strike against a Hamas facility on
Thursday in response to a rocket fired from the Gaza Strip, the Israeli army
said. No one was hurt in the night-time rocket attack on southern Israel, the
army said in a statement...
-----------------------------------
This special Press Review reviews articles from the French
and Engligh-speaking international online media relating to the unfolding
global crisis.
It is delivered freely on a weekly basis to 60,000
recipients worldwide.
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