Chinese bank scandal

[Wojtek Sokolowski]

At 12:24 PM 1/6/00 -0500, Doug wrote:
>[News from what some people persist in calling "socialist China" - 
>though I guess you could spin this into a tale of the perils of state 
>ownership.]
>
>Wall Street Journal - January 6, 2000
>
>Collapse of Illegal Bank in China
>Spotlights Highly Risky Venture

How?  The problem was precisely the *private* and unauthorised ownership of
the said bank.  This is a typical 'high information asymmtery' condition
that in the nc textbook is causing 'transaction failure' i.e. plucking
buyers who cannot asses the quality of the product they receive, and thus
requires remedies of public or semi-public institutions. 

wojtek