It is an interesting fact that, as this excellent account shows, China's rotten banking system should have so many things in common with America's Savings and Loans crisis. In the 1980s, the world's most sophisticated financial market place went through some terrible regulatory mishaps and a $150 billion bailout before the losses from savings and loans sector were staunched.
It is a bit like a time machine. The Chinese banking sector could be described as being in that stage of decomposition that the thrifts were in just before the whole sector collapsed in the late 1980s. That stage is brilliantly described in the chapter by Edward J. Kane, and it has...
