Don't rule off the list on China risks just add, here's another
Bloomberg report on the adjusted loan-to-deposit ratio
- This includes a range of off-balance sheet items
- An indicator of the banking system's ability to weather stress
- Its rising much faster than the official loan-to-deposit ratio as banks pile into off-balance sheet lending
And:
- At the current pace, overall credit could surpass deposits on an adjusted basis within a few years -- a level that would give China little leeway to stave off financial turmoil, S&P says.
- "The next two to three years is a crucial window for China to rein in the ratio, or we will be in serious trouble," said S&P's Beijing-based director Liao Qiang. "Reaching 100 percent doesn't mean a crisis will ensue immediately, but it shows China's entire deposit base is used up and any loss of confidence from savers will severely destabilize the banking system."
2 to 3 years?
OK, I'm not gonna worry about it 'til then. Rock on!
