Asia managers warn of threat from Chinese 'zombie banks'

IMF urges China to bring state-owned banking sector into line with international practices

The International Monetary Fund (IMF) has urged China to bring its financial sector into line with the West, as leading Asia managers warn a looming spike in defaults could create a raft of ‘zombie banks’. The IMF’s latest report on China’s stability said its banking system entered the global crisis from a position of strength, but has become increasingly complex, while off-balance sheet activity is rising. “Institutional reforms will help bring the system more in line with international practices,” the IMF said, adding China needs a framework to allow orderly wind ups of distressed ...