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Mapping shadow banking in China: structure and dynamics

Torsten Ehlers, Steven Kong and Feng Zhu

No 701, BIS Working Papers from Bank for International Settlements

Abstract: We develop a stylised shadow banking map for China with the aim of providing a coherent picture of its structure and the associated financial system interlinkages. Five key characteristics emerge. One defining feature of the shadow banking system in China is the dominant role of commercial banks, true to the adage that shadow banking in China is the "shadow of the banks". Moreover, it differs from shadow banking in the United States in that securitisation and market-based instruments play only a limited role. With a series of maps we show that the size and dynamics of shadow banking in China have been changing rapidly. This reveals a marked shift in the relative importance of different shadow banking activities. New and more complex "structured" shadow credit intermediation has emerged and quickly reached a large scale, while the bond market has become highly dependent on funding channelled through wealth management products. As a result, the structure of shadow banking in China is growing more complex.

Keywords: shadow banking; wealth management products (WMPs); investment receivables; entrusted loans; trust loans (search for similar items in EconPapers)
JEL-codes: G2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cna and nep-tra
Date: 2018-02
References: View references in EconPapers View complete reference list from CitEc
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