China’s ‘mini-Lehman’ moment to spur smaller bank consolidation

By Sumeet Chatterjee and Cheng Leng HONG KONG/BEIJING (Reuters) - China is set to see consolidation among its smaller banks after a rare government seizure of a troubled Inner Mongolia lender in May, as Beijing looks to avert any systemic risk amid a slowing economy and an escalating trade war with the United States. Mergers of weaker small banks with stronger peers is seen by analysts as the best option for a sector reeling from rising bad loans and funding costs, and which Beijing is wary of due to the likely knock-on effects should some lenders start to fail

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