Caixin OnlineOpinionMagazine Columnist谢国忠 Andy Xie Who Should Pay for Trusts that Go Bust?
01.28.2014 16:51

Who Should Pay for Trusts that Go Bust?

If the government bails everyone out this time around, it will be hit with an even bigger tab when the music's over in the property market
By Andy Xie

While preventing a systemic crisis in coping with failing trust products should be a priority, indiscriminate bailouts would merely delay the inevitable and leave a bigger blowup in a year. In resolving the current problems, the central government must deal with two evil forces that are poisoning China's financial system: moral hazard and adverse selection.

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