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- Title
Shadow banking in China compared to other countries.
- Authors
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.
- Subjects
CHINA; NONBANK financial institutions; SHADOW banking system; ECONOMIC stimulus; FINANCIAL security; BANKING laws; SUPPLY &; demand
- Publication
Manchester School (1463-6786), 2021, Vol 89, Issue 5, p407
- ISSN
1463-6786
- Publication type
Article
- DOI
10.1111/manc.12331