Zombie banks Tài chính tiền tệ

ZOMBIE
BANK



Types of zombie
What is zombie bank?

Limitation

01

02

03

04

05

06

banks

Examples

Coronavirus
(Covid19) ?

Conclusion

A zombie bank is a bank that would
not continue existing without

1. WHAT IS ZOMBIE
BANK?

government help, either in the form of
bailouts or some kind of guarantee or
credit support. Its economic net worth
is less than zero – if you add up all its
assets and deduct its liabilities, you
end up with a negative number


A zombie bank is an insolvent financial
institution that is able to continue operating
thanks
to explicit or implicit support from the
government. They have large amounts of 
nonperforming assets on their 
balance sheets and are kept afloat to
prevent panic from spreading to healthier
banks.


1. WHAT IS ZOMBIE BANK?
- A zombie bank is an insolvent financial institution

- A net value less than zero,

- Total liabilities are greater than total assets

- All contributed capital - registered capital no longer
exists but is still allowed to operate (supported by the
government)


2. TYPES OF
ZOMBIE BANK


3. TYPES OF ZOMBIE BANK

- The first group is the zombie bank group
that has not been "exposed"

- The second group is the group of zombie
banks that have been exposed


3. LIMITATION


3. LIMITATION

- Shutting down struggling banks can
incite widespread panic.

- By not liquidating zombie banks,

investors’ capital is trapped, instead of
being put to more productive use.


“Extend and pretend regime.” – “ Thế giới mở rộng và giả vờ”
—BY RAGHURAM RAJAN


EXAMPLES SHOW
OBVIUOSLY


Ocean Commercial Joint
Stock Bank (Ocean
Bank),
Total bad debts December 31, 2015
were VND 476.86 trillion (roughly US$21

3 BANKS
“ZERO VND”
IN VIETNAM

billion), accounting for 8.85 per cent of
total outstanding loans.

Construction Bank (CB
Bank)

 Financial Institutions would not be
subject to the Law on Bankruptcy

 The SBV was therefore forced to buy
weak commercial banks as a last resort,
with no other possible solution being
available.

Global Petroleum Commercial
Joint Stock Bank (PGBank).


Japan
When its real estate bubble collapsed in 1990, Japan kept its
insolvent banks going, rather than recapitalizing them or letting

BANKS OF
FOREIGN
COUNTRIES IN
THE PAST FCRISIS

them go bust, as the U.S. did during the S&L crisis. Nearly 30
years later, Japan's zombie banks still have large amounts of
non-performing loans on their books. Instead of helping Japan to

EXAMPLES SHOW

recover, these banks locked its economy into a deflationary trap
that it has never escaped from.

Europe
In its desperation to avoid becoming Japan after the 2008 global
financial crisis, the Eurozone made the same mistake. Zombie

banks, stuffed with toxic liabilities, have increased lending to
existing impaired borrowers, instead of financially healthy or
new borrowers. This zombie lending behavior by distressed
banks, designed to avoid realizing losses on outstanding loans,
has led to a significant misallocation of credit, which has hurt
creditworthy firms. No other economy has taken longer to
recover.

OBVIOUSLY


Coronavirus And The Zombie Attack On
Indian Banks

WILL CORONAVIRUS
CREATE ZOMBIE
BANKS ?


CONCLUSIONS OF THESE
POINTS !

FINANCE

CURRENCY
A zombie bank is an

Restoring banks back to health

They are kept afloat to

insolvent financial

can cost hundreds of billions of

prevent panic from

institution that is able to

dollars, weigh on economic

spreading to healthier

continue operating

growth, and prevent investors

banks.


THANKS