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Shadow Banking, Chinese Style

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  • Shalendra D. Sharma

Abstract

Shadow banks are broadly defined as entities which conduct credit intermediation outside the formal banking system. Poorly regulated, engaging in opaque forms of intermediation, deeply interconnected with the official banking system, and operating with implicit government guarantees, they pose a major source of systemic risk. Yet shadow banks provide an important service by channeling credit to excluded investors, and can complement the formal banking sector. What explains the rapid proliferation of shadow banks in China? How large are they and what forms do they take? What types of risks do they pose to the financial system? And how best can China utilise the services of shadow banks while at the same time ensuring that they do not create systemic risks for the financial system?

Suggested Citation

  • Shalendra D. Sharma, 2014. "Shadow Banking, Chinese Style," Economic Affairs, Wiley Blackwell, vol. 34(3), pages 340-352, October.
    • Handle: RePEc:bla:ecaffa:v:34:y:2014:i:3:p:340-352
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    References listed on IDEAS

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    Cited by:

    1. Samuel Erasmus Alnaa & Ferdinand Ahiakpor & Ahmed Abdul-Majeed, 2020. "Recapitalization and banks performance in Ghana," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 10(6), pages 176-183, June.
    2. Rose Neng Lai & Robert Van Order, 2019. "Shadow Banking and the Property Market in China," International Real Estate Review, Global Social Science Institute, vol. 22(3), pages 359-397.
    3. Rose Neng Lai & Robert Van Order, 2019. "Shadow Banking and the Property Market in China," International Real Estate Review, Asian Real Estate Society, vol. 22(3), pages 361-399.

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