It is now widely accepted that the recent global financial crisis was actually a balance-sheet crisis. Long periods of negative interest rates facilitated the unsustainable financing of asset purchases, with high-risk mortgages weakening national balance sheets. When liquidity in the key interbank markets dried up, the fragilities were exposed – with devastating consequences. CommentsView/Create comment on this paragraphToday, the rapid expansion of Chinese financial institutions’ balance sheets – which grew by 92% from 2007 to 2011, alongside 78% nominal GDP growth – is fueling predictions that the country will soon ... (full story)