“Shadow banking is yet to destabilise China’s financial system”
Qiang Liao, senior director of financial institutions ratings at S&P’s, feels that shadow banking activities are more of a symptom, than cause of emerging systemic risks to the domestic banking sector.
Shadow banking has, undoubtedly, been growing at a rapid clip in China. According to Standard & Poor’s estimates, shadow banking accounted for Rmb22.9 trillion ($3.7 trillion) of credit in China at the end of 2012, after making adjustments to avoid double counting. We estimate credit in this market has increased at a compounded annual growth rate of 34% since the end of 2010. We believe that growth is likely to remain strong for at least the next few years, albeit at a slightly slower rate.
Categories: Capital & Strategic Issues
, Risk and Regulation
, Qiang Liao
, Shadow Banking
, Credit Risk
, Contagion Risk
, Systemic Risk