China Banks State Owned, No Possibility to Fail: Engle

The transcript discusses the concept of stress tests and their application using market data. It highlights a shift in global risk from Japan to China, focusing on China's banking sector challenges. The conversation explores the complexities of modeling risk in China, emphasizing non-probabilistic uncertainty. It also examines the transfer of risk from banks to investors and questions the safety of financial markets. The discussion concludes with observations on different regional banking practices and risk management strategies.

What is the significance of the statement 'the banks are already state owned' in the context of risk management in China?

In what ways have the banks in the US changed their capital strategies compared to those in Asia?