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Shadow banking and firm financing in China

Author

Listed:
  • Lu, Yunlin
  • Guo, Haifeng
  • Kao, Erin H.
  • Fung, Hung-Gay

Abstract

Shadow banking, an informal, largely unregulated, financial market, has become increasingly important in China because the fact that it is largely unregulated can threaten the viability of the financial system. This study discusses various issues involved in Chinese shadow banking, including the type, size, risk, and reasons behind the growth of this market. Small and medium-size enterprises (SMEs) in China in particular rely on this informal market as they have limited opportunities for obtaining funds in the formal market. Policymakers have to implement financial reforms to incorporate this informal market into the formal one so as to exercise better control and monitoring.

Suggested Citation

  • Lu, Yunlin & Guo, Haifeng & Kao, Erin H. & Fung, Hung-Gay, 2015. "Shadow banking and firm financing in China," International Review of Economics & Finance, Elsevier, vol. 36(C), pages 40-53.
    • Handle: RePEc:eee:reveco:v:36:y:2015:i:c:p:40-53
    DOI: 10.1016/j.iref.2014.11.006
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    References listed on IDEAS

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    More about this item

    Keywords

    Growth; Market impediment; Regulations; Shadow banking; Size;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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