Chinese Banks and Unreported (illegal) Transactions
Dec 18, 2009
Here's a good example of how newspapers report the illegal activities of foreign banks but do not report what is happening in their own country. Fitch Ratings, as reported by Bloomberg News, tells on the Chinese banks, but neglects to say where they learned to do such stuff. Furthermore, there are a lot of Western banks there, too, as the article goes on to say, and you can bet on it that they all have two sets of books in their accounting procedures.
The increasing amount of unreported transactions, including repackaging loans into wealth management products to sell to investors, and the outright sale of loans to other financial institutions, represent a “growing pool of hidden credit risk,” Fitch said in an annual review of Chinese banks.
It's this "hidden credit risk" that poses the biggest problem for the banks in America that are too greedy to fail. The only part of the banking crisis that has been solved is the official accounting on the open set of financial records. I'm more concerned about their other unofficial bookkeeping.