Fitch predicted China banking crisis

The probability of a banking crisis in China by mid- 2013 is estimated at 60 percent. This, as reported by Bloomberg, said senior director of Fitch Rating Agency, Richard Fox (Richard Fox). According to experts of rating agency, a systemic crisis may occur because of growth in lending and a sharp rise in price of real estate in the country. Under the systemic crisis in the Fitch understand the need for substantial additional capitalization of the banking system and a large number of defaults on local financial institutions. According to Fox's conclusions about the likelihood of a crisis in China are made on the basis of index MPI (macro-prudential indicators). He has already helped Fitch warn investors about the possible problems in the banking systems of Ireland and Iceland. The Chinese authorities in recent months, regularly take measures to reduce credit growth and the reduction in property prices. In particular, China has gradually increased the base rate and tightened reserve requirements for banks. In 2010 by local financial institutions have banned lending by more than 7.5 trillion yuan (1.1 trillion U.S. dollars). This is 22 percent smaller than the volume of lending in 2009. Fears Fitch had no immediate impact on the Chinese market. Thus, Stock Index Hang Seng Finance Index, which includes five Chinese banks, rose to the middle of the trading session on March 8 and a half per cent. Source: Lenta.ru