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China allows Baoshang Bank to go bankrupt in final cleanup

Original shareholders' and unprotected creditors' rights to be liquidated

Baoshang Bank had 556 billion yuan in assets and 290 billion yuan in bad loans by the end of 2017.   © Reuters

Troubled Chinese regional lender Baoshang Bank will file for bankruptcy and liquidate its remaining assets in a final step to clean up the mess that triggered a high-profile asset seizure by the state, the central bank said Thursday.

The equity of Baoshang Bank's original shareholders and unprotected creditors' rights will be liquidated in accordance with the law, the People's Bank of China (PBOC) said in its second-quarter monetary policy report. Authorities will hold accountable relevant people linked to the bank's troubles, the central bank said.

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