China will set up an asset management company for each of its four biggest commercial banks by the middle of this year to relieve them of their non-performing loans, according to a central bank official. The news follows the launch of a pilot asset management company set up for one of the four banks, China Construction Bank, or CCB (ASRI 1/25/99, p.6).
"The four state-owned commercial banks will establish their own asset management companies in the style of the U.S. Resolution Trust Corporation," Liu Mingkang, deputy governor of the People's Bank of China (PBOC) said in a recent speech. "They are going to take over their historic burdens, recover them through auctions, debt equity swaps and securitization, under a mandate given by the central bank."