Chinese Shadow Banking: Bank-Centric Misperceptions

Tri Vi Dang, Honglin Wang and Aidan Yao
Additional contact information
Tri Vi Dang: Columbia University and Hong Kong Institute for Monetary Research
Honglin Wang: Hong Kong Institute for Monetary Research
Aidan Yao: AXA Investment Managers

Working Papers from Hong Kong Institute for Monetary Research

Abstract: In this paper, we provide a qualitative and theoretical framework to analyze the rapid growth of shadow banking in China. An important characteristic of the system is its close connection with traditional banks, making it very bank-centric. Our theoretical model employs the concept of "information sensitivity" - a measure of tail risks - by Dang, Gorton and Holmstrom (2013) and suggests that Chinese shadow banking is built on the asymmetric perception of information sensitivity among shadow banking entities, banks and investors. Compared to the US, we show that shadow banking in China is built on different mechanisms (implicit guarantees in China versus financial engineering in the US) and operates on different platforms (banks versus capital markets).

Keywords: Number:; 222014 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2014-09
New Economics Papers: this item is included in nep-ban, nep-cna and nep-tra
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.hkimr.org/uploads/publication/394/wp-no-22_2014-final-.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.hkimr.org/uploads/publication/394/wp-no-22_2014-final-.pdf [301 Moved Permanently]--> http://www.aof.org.hk/research/HKIMR/uploads/publication/394/wp-no-22_2014-final-.pdf [301 Moved Permanently]--> https://www.aof.org.hk/research/HKIMR/uploads/publication/394/wp-no-22_2014-final-.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hkm:wpaper:222014

Access Statistics for this paper

More papers in Working Papers from Hong Kong Institute for Monetary Research Contact information at EDIRC.
Bibliographic data for series maintained by HKIMR ().