BAOTOU, China -- China's first government takeover of a bank in 18 years sent shudders through the financial sector, suggesting growing concern among the authorities that ailing smaller lenders serving struggling local economies could at some point spark a broader financial crisis.
Baoshang Bank, a private lender based in this Inner Mongolian city 600 km west of Beijing, found itself under state control overnight May 24, indicating that the institution is essentially bankrupt. A taxi driver named Zhang recalled the chaos from that evening.
