In that speech, apart from labeling the global banking Basel Accords as an “old people’s club,” Ma said “systemic risk” is not the issue in China. Rather, China’s biggest risk is that it “lacks a financial ecosystem.” Chinese banks are like “pawn shops”, where collateral and guarantees are the hard currencies. As a result, some decided to go so big they are not allowed to fail. “As the Chinese like to say, if you borrow 100,000 yuan from the bank, you are a bit scared; if you borrow a million yuan, both you and the bank are a little nervous; but if you take a 1 billion yuan loan, you are not scared at all, the bank is,” Ma said.
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CW8888
When Ant goes globally and has 1 billion borrowers who can't pay back. Now who will be scared har???
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Hi Uncle8888,
ReplyDeleteThat line about banks being scared was likely uttered by Paul Getty back in the 1920s or 30s ... if u borrow $100 from the bank, it's your problem. If you borrow $100M, it's the bank's problem.
It was used again during the height of the GFC in late 2008. Of course by then, the $100M has been replaced by $100B lol.
Jack overestimated the goodwill Beijing had for him & his companies when he started criticising last month. Afterall, the govt had all along closed an eye to the systemically crucial shadow banking system for the past 20 years.
When Jack took the risk to dabble in unregulated financing more than 10 yrs ago, he reportedly said, "If anyone has to go to jail, I will go." Doubt it will reach that stage though. Lol!
He just has to eat humble pie & suck it up to Beijing for a while. In the meantime Ant will continue collecting lots of revenue from mainlanders lol.
When it comes to foreign markets though, I doubt if Ant will be so freewheeling as in China. In China, the data collection, AI real time data analysis, and the everywhere nature of e-commerce & e-finance allows Ant to have on-the-fly knowledge of any mainlander's credit worthiness and how risky he is.
Overseas, Ant will fall back on more traditional & conservative underwriting and credit checks. Unless foreign govts are willing to be as wired AND as lax about data privacy as Beijing! :)
The current price weakness in Alibaba is an opportunity for those willing to hold for a few years. ;)