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China’s $1.7 trillion hangover

China’s $1.7 trillion hangover

Up to 40% of China’s $1.7 trillion LGFV loans are at high risk of default. What’s a panicking Beijing to do?

May 1997

Yann Gindre, Global head of debt capital markets, Commerzbank



Yann Gindre became an instant celebrity last summer - but not for reasons entirely of his own choosing. When most high-rolling Euromarketeers were lying on tropical beaches or on their private yachts, Gindre became the centre of a tug-of-war, as senior executives at BZW in London jockeyed for position following the arrival of Robert Diamond from Credit Suisse First Boston as BZW's new fixed-income supremo.

Think back and remember the chronological progression of events following the untimely death of BZW's chief executive, David Band, in February 1996 while on a skiing holiday. In the same month Diamond was ousted from the then CS First Boston (now CSFB) after losing a bloody battle with Allen Wheat and the head of domestic fixed-income, John Costas.

Diamond, with a brilliant career at Morgan Stanley as well as CSFB, suddenly became BZW's best hope to make the bank a fixed-income powerhouse. Diamond had met Band...


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