After all, here were three big institutions, still majority owned by Beijing, that had to be bailed out just three years ago using $60 billion of the nation’s capital. Yet here they were baring their souls to the world – and being more forthright about sub-prime than many of the global investment banks that advised them on their record-breaking Hong Kong equity offerings.
Industrial and Commercial Bank of China came first. The world’s largest lender by market value said it was sitting on $1.23 billion-worth of sub-prime-related mortgage-backed securities, accounting for 4.3% of its foreign exchange investment portfolio. Then came the big fish in the pond. Bank of China trails ICBC in assets and market capitalization but it has more overseas branches in more countries, and has been buying and selling US treasuries for years. For a long time it was Beijing’s main financial conduit to the world....
