Banking sector problems leading to bank insolvencies have been frequent in recent decades in developed and developing countries alike. The macroeconomic consequences of banking crises are well known. Moreover, financial distress helps in propagating the adverse shocks to the real sectors of the economy when banks reduce lending to creditworthy borrowers. The real effects of banking crises are worse for sectors that have very limited alternatives to bank financing, something that applies across the board in developing countries. Dell’Ariccia et al. (2008) find evidence in this regard and suggest that banks need to be supported during distress to prevent a vicious circle in which banking distress and economic contraction reinforce each other.
Predatory lenders use misinformation, fraud and racial targeting to trap vulnerable homeowners into unaffordable debt. Predatory loans may be characterized by negative amortization, unexpected balloon payments, flipping and excessive or duplicate fees.
Estimates of the costs of predatory lending exceed $9 billion in lost equity, and several studies indicate that predatory lending disproportionately affects minority families and older urban neighborhoods (Richardson, 2002; Bocian, Ernst and Li, 2006; Bradford, 2002; ACORN, 2000; Fishbein and Woodall, 2006b). Financial services experts identify predatory lending as one of the most salient issues facing the financial services industry today (Carr and Kolluri, 2001; Squires, 2005).
China is undergoing a social, economic, and nutritional transition, and the result is a significant change in the social environments and lifestyles of people (Liu, 2008). China is becoming wealthier; however, the country faces public health risks and a growing prevalence of chronic diseases. Spending on healthcare has not kept up in pace with the economic growth that China has achieved (Liu, 2008).
