sub prime loan crises didn't render Chinese banks safe. A US report said Chinese financial institutions had bought US$107.5 billion worth of US mortgage securities by the end of June last year, accounting for 47.6 percent of similar investments amongst Asian countries. US
And a part of those may be the highly risky sub prime loan securities, the Shanghai-based Oriental Morning Post quoted an industry insider as saying today.
According to a report from the United States Department of the Treasury, several large banks from
have bought sub prime loan backed securities. China
Bank of China (BOC) was thought to be the biggest buyer. Sources said that by the end of last year, BOC held US$90.1 billion worth of US bonds. Assuming five percent of them are securities related to sub prime loans, capital at risk could total in the multi-billion dollar range.
However, BOC officials didn't expect such a serious outcome. Zhu Min, vice president of the bank, said BOC did invest several billion dollars in the sub prime loan bonds, but the loss is thought to be only millions, only slightly impacting the bank's overall operations.
The report also said investment from Industrial and Commercial Bank of
, Bank of Communications, and China Construction Bank also included sub prime loans, although most of them said the amount was not large enough to seriously affect revenue. China