Shadow banking in China compared to other countries

Allen, Franklin; Gu, Xian

Abstract

China's shadow banking has been rising rapidly in the last decade, mainly driven by regulations for banks, the Fiscal Stimulus Plan in 2008 and credit constraints in restrictive industries. This sector has continued growing although the regulators repeatedly attempted to impose new regulations on banks and nonbanks. The existence of shadow banking fulfills the high demand for funding. The standard view is that it poses risks to financial stability. However, in China, this is not necessarily the case. Entrusted loans, implicit guarantees from nonbanks, banks or government may provide a second‐best arrangement in funding risky projects and improving welfare.

Citation

Allen, F., & Gu, X. (2021). Shadow banking in China compared to other countries. Manchester School, 89(5), 407-419. https://doi.org/10.1111/manc.12331

• Journal Article Type: Article
• Acceptance Date: May 21, 2020
• Online Publication Date: Jun 21, 2020
• Publication Date: Aug 31, 2021
• Deposit Date: Jul 8, 2020
• Publicly Available Date: Jul 8, 2020
• Journal: Manchester School
• Print ISSN: 1463-6786
• Electronic ISSN: 1467-9957
• Publisher: University of Manchester
• Peer Reviewed: Peer Reviewed
• Volume: 89
• Issue: 5
• Pages: 407-419
• DOI: https://doi.org/10.1111/manc.12331
• Public URL: https://durham-repository.worktribe.com/output/1261192