Banking

Chinese Banking system analyses by Prof. Geraci

So let's start our journey directly from the field from China and we do it with Professor Michele Geraci already undersecretary in the Italian government for economic development, professor of economics, economist who teaches in Shanghai we should already...
Last year, the bank approved 9 projects, for a total of 1.7 billion USD. 6 of those 9 projects were cooperative projects between AIIB and other banks, like the World Bank and the Asian Development Bank. AIIB only invests 1.7% of its resisted capital. 9 projects does not sound a lot, but it is import to note that most of this projects have concentrated in the transport and energy sectors, which are two of the main key areas of development that central Asia needs.
In an op-ed written by Morgan Stanley, Global Researcher Chen Aiya, re-affirms his confidence in China’s ability to deal with its increasing debt. I often encourage analysts to look at China as if it was a firm and estimate the usual profitability ratios used in Corporate Finance. In the case of China’s debt and GDP growth path, one could say that its ROC is declining, but still respectable. This decline occurs because current Chinese growth model is based on investment to drive GDP.
With the passing of time, as more and more analysts do their analysis based on numbers and not on slogans, the cost for Italy to leave the Eurozone seems to magically get smaller and smaller. Before, pundits were predicting a total collapse of the economic system; later on some economists estimated the actual costs. Last week, even the ECB broke the tabu and estimate in 350bn the cost of italy leaving the Euro. Today, Mediobanca, published a report arguing that if Italy were to leave the Eurozone, it would actually SAVE money, 8bn, not much. But it is now clear that we are getting closer to a more serious debate. I, for my part, have been saying that the Euro would bring disaster to Italy since the late 90s.
China's central bank said on Friday that it will eventually ban all non-bank payment agencies, including Alipay, from using clients' money. In my view this is a further attempt to regulate the online payment industry in China and try to protect customer deposits. Maybe a negative impact on Alibaba who was pushing to enter the banking industry but, without a banking license, it is proving tricky.
Mr Trump’s advisers have suggested the Fed’s ultra-stimulative policies are unfair by penalising savers and have led to unequal implications for different segments of society. During the campaign Mr Trump was ferociously critical of Janet Yellen, the Fed chair, for her low-rates policies, but she is not expected to resign before her term expires in 2018
KPMG has just released a report on the Global Fintech trends and highlights leading the most innovative companies. China has now 4 out of the top 5 companies and 8 out of the top 50 list.
Banks held asset management services since 2004, and till now the balance has reached 26.28 billion. It has become an amount which cannot be ignored. Debt market will be affected by this action. Most of the off-balance-sheet items is non-guaranted asset management projects, which increased the leverage amount banks can provide.

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