The Change Mariner

China Announces New Bailout of Big Banks

New York Times:

Desmond Supple, an economist at Barclays Capital, wrote in a research report on Tuesday that the banks would be able to write off loans as uncollectible and make corresponding accounting entries against their equity without converting the dollars into yuan.

The State Administration of Foreign Exchange said the transfer to the banks was actually accomplished at the end of last year, which will allow the banks to show the extra capital in their year-end accounts. Several bankers said this might make it easier for the banks to pursue stock offerings by the end of this year. The foreign exchange agency said that even after deducting $45 billion, China's foreign reserves leaped $116.84 billion last year, to $403.25 billion.