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Troubled regional banks are plunging into riskier corners of the credit markets, in a battle to survive ultralow interest rates and an industry shakeout.

As debt yields tumble globally, the lenders are also facing weak business at home, where a shrinking population is hitting outlying areas hardest, and that’s prompting authorities to push for consolidation. Desperate to avoid that fate, the banks are shedding their traditional conservatism, fueling questions about their ability to manage riskier holdings including foreign assets.

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