Wenzhou City Assigns 100 Judges to Resolve Bad Loans, News Says
The judges will work with 50 to 100 financial institutions starting next month to deal with soured assets in the city’s banking system, the state news agency reported yesterday, citing unidentified court officials. Wenzhou’s non-performing loans have soared to 23.86 billion yuan ($3.8 billion), from 8.6 billion yuan in 2011, according to the news agency.
That's the trouble with a shadow banking system, it doesn't have a reserve.
The judges will provide legal assistance to companies that have promising outlooks, while weeding out failing enterprises in industries with high pollution and energy consumption through bankruptcy, the news service said.
The Chinese are about to learn about the creative destruction portion of the economic cycle.
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