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7 Chinese banks expose 721 million in Lehman bonds

Source: PTI
September 22, 2008 18:59 IST
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Two more Chinese banks on Monday reported holding bonds of the bankrupt US investment bank Lehman Brothers, raising total debt disclosed by seven domestic lenders to a whopping $721.8 million.

China Construction Bank said that it holds $191.4 million in Lehman bonds. That size of the exposure was the biggest reported so far for a Chinese bank since the financial crisis broke out in the United States.

The Lehman Brothers bankruptcy would not have a significant impact on CCB's financial situation, the bank said.

A mid-size lender, China CITIC Bank Corp said it has $76 million in Lehman bonds.

Earlier, the country's top lender, the Industrial and Commercial Bank of China said it held bonds worth USD 151.8 million in Lehman.

Bank of China said $128.8 million of its funds were exposed while China Merchants Bank said it had $70 million worth of bonds of Lehman. The Bank of Communication had $70.02 million in Lehman while Industrial Bank has exposed $33.6 million, Xinhua news agency reported.

Meanwhile, US President George W Bush on Monday discussed the latest situation in the American financial market. Bush told Hu over phone that his government had taken and would continue to take necessary measures to stabilise the domestic and world financial markets, the report said.

The Bush administration is pushing a plan to spend $700 billion to buy distressed mortgages and mortgage-related securities from financial institutions.

The turmoil in the US financial sector caused by exposure to those securities had caused volatile swings in global financial markets recently.

Hu hoped the measures would soon take effect and lead to a gradual recovery of the financial market.

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