China, Asia Dig Out of Recession Much Faster Than U.S.

While 10 stressed U.S. banks figure out how to come up with $75 billion, here’s a comparison to ponder: In 2005, the world’s two biggest banks in terms of market cap were Citigroup and Bank of America. In 2009, the world’s three biggest banks are Chinese; Citigroup and BofA are not even in the top 20. In a related sign of the times, BofA is reportedly looking to sell a chunk of its holdings in one, what is now the world’s second biggest financial institution, the Chinese Construction Bank. BofA needs the money, an estimated $8 billion worth for some “quick capital” to toss into the roughly $34 billion hole the government’s stress test has determined it faces.

By Andrew S. Ross
San Francisco Chronicle

The point, as speakers made at a California-Asian Business Council luncheon this week, is that Asia in general, and China in particular, is digging itself financially out of the Great Recession far faster than we are. One key reason: Asian banks didn’t go in for those toxic assets that so many U.S. financial institutions gorged on, explained Cindy Marks, China and Hong Kong Country Manager for the Federal Reserve Bank of San Francisco. In the first three months of this year, she added, Chinese banks have made $640 billion in new loans.

Pity BofA has to sell that Chinese bank stock, Marks noted.

Read the rest:
http://www.sfgate.com/columns/bottomline/

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