Bank bailout signals Beijing’s support for financial sector

Despite their credit risks, the Chinese government’s bailout of a modest commercial bank highlights Beijing’s support for Chinese financial institutions. Institutional investors of Baoshang Bank, however, may have to take a haircut.

“The People’s Bank of China PBOC and China Banking and Insurance Regulatory Commission CBIRC continue to provide policy support to small and medium banks and push them to improve their corporate governance, to foster healthier growth in small and medium banks,” said the PBOC on Sunday.

The CBIRC and PBOC have taken over Baoshang Bank for one year, until 23 May 2020, the CBIRC announced. The financial regulators have entrusted China Construction...