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How Vulnerable are Chinese Banks to a Real Estate Downturn?
China is currently undergoing a new round of bank stress testing, with a drop in real estate prices certain to be amongst the variables tested. Previous stress tests, both official and unofficial, have downplayed the risks to the banks from a housing price downturn. For example, a recent report from the Bank of Communications Financial Research Center estimated that a decline in housing prices by less than 30 percent would have little to no impact on the non-performing loan (NPL) ratio in the banking system. Even a larger price drop of 40 to 50 percent would only increase the NPL ratio by 3.8 to 5.6 percentage ... (full story)
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When the facts change I change my mind, what do you do sir