Hayman Capital's Bass: China's real problem is its banking sector

``"When you run a bank expansion that aggressively, that quickly, you're going to have some losses," he said, adding that "the scary thing about that" is a "likely" 10 percent asset loss in that banking sector would amount to $3 trillion. Such losses would force China to use much of its foreign exchange reserves (which stand at about $3.6 trillion) and sell bonds to recapitalize the banking system, he said.''