Smaller Chinese banks still gambling on risky wealth management products
Smaller banks in China are experiencing rapid growth rates in the wealth management market by offering high-risk WMPs to customers, placing the country’s banking sector in jeopardy. August 08, 2012 | Baron LaudermilkThe volatile global economy, coupled with China’s perceived financial slowdown, has altered the behaviours of Chinese high-net-worth-individuals (HNWIs). China’s top four banks, as well as other mid-sized joint-stock banks have observed this change, and modified their strategies accordingly, moving from offering highly lucrative, short-term financial instruments, to more long-term, fixed-income wealth management products (WMPs). However, many smaller, rural, commercial banks have not followed suit and are still issuing risky WMP products to gain an edge in the market. The actions of these smaller banks could have serious implications for the Chinese economy in terms of creating investor panic and threatening banks' stability because it reduces the amount of capital in banks, which may lead to a lack of liquidity. Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: China, Retail Banking, Wealth ManagementChina,retail,Wealth Management, China,Retail Banking,Wealth Management, Keywords:China Merchants Bank, Shanghai Pudong Bank, ICBC, Tang Jiahui, ICBC, Zheng Zhiguang, Bank Of Beijing, Fitch, World Gold Council, Ferdinand Jonkman, HNWIs, WMPs China Merchants Bank, Shanghai Pudong Bank, ICBC, Tang Jiahui, ICBC, Zheng Zhiguang, Bank of Beijing, Fitch, World Gold Council, Ferdinand Jonkman, HNWIs, WMPs
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