Faculty News

Professor Robert Engle identifies financial risks in China

Excerpt from Bloomberg -- "The risk is really interesting because the banks in China are owned by the government. They're state-owned enterprises. Much of the loans are to state-owned enterprises or to municipal governments. And so, in many ways, all this risk is essentially guaranteed by the government. So you might think there's no risk at all. But really, it's the government that bears that risk, and the government bears risks of trillions of dollars of loans. And unless there is better risk management by the banks and by other institutions, this risk is going to surface and be another negative factor in the Chinese growth puzzle."

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