China’s failing banks will no longer be propped up

China is drafting rules to manage the risks of bank failures, as the nation’s lenders face rising loan defaults and increased competition. The People’s Bank of China and the China’s Banking Regulatory Commission are working on a plan to ensure the safety of deposits and orderly repayments of banks’ debts during a crisis. In the draft, financial institutions deemed to have failed will be allowed to cease operations rather than be propped up, according to Bloomberg News on May 12, citing two people who declined to be named.