Chinese bank scandal

Wojtek Sokolowski sokol at jhu.edu
Thu Jan 6 11:34:04 PST 2000


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



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