Peter S. Goodman: China’s Unyielding Banking Crisis
As he rose through the ranks at China’s largest lender, Zhang Guilin helped build the bad debt crisis plaguing his country’s banks, the gravest threat to this fast-growing economy. Zhang directed funds to cronies and political allies, authorities here say, adding to a national toll of bad loans estimated at $500 billion.
Five years ago, Zhang was given a job as head of the local office of a new government-formed company charged with cleaning up the very financial mess he helped create. The new company took over the bad debts at his old bank and tried to recover what it could by selling off the properties pledged as collateral.