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Finance

China readies massive bank bailout fund as slowdown looms

Lifeline for big institutions aims to mitigate systemic risk in times of turmoil

BEIJING -- China is expanding its safety net for the financial sector with a new rescue fund that could run into the tens of billions of dollars, as a cooling domestic economy and tightening monetary policy abroad pose growing risks.

The new financial stability security fund is expected to provide a backstop for big institutions, such as banks, insurers and leasing companies, in cases of imminent collapse or widening investment losses sparked by overseas market turmoil that risk undermining the financial system as a whole.

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