Issuance of Wealth Management Products and Expected Yields; A Shadow Banking Perspective

Syed Mehmood Raza Shah, Qiang Fu, Muhammad Dawood and Muhammad Ishfaq

MPRA Paper from University Library of Munich, Germany

Abstract: In the last decade, shadow banking in China has expanded rapidly, driven predominantly by banking regulations and credit restrictions on specific industries. Wealth management products are considered the largest contributors to the overall shadow banking sector in China. The majority of these products are off the balance sheet and offer much higher yields than conventional deposit rates. This study aims to examine how commercial banks, more specifically small and medium-sized banks (SMBs), utilize wealth management products to offer higher yields on new products. This study comprises the top 30 Chinese banks from the first quarter of 2013 to the last quarter of 2019. A fixed-effects approach was adopted by implementing the panel corrected standard errors (PCSE) and Driscoll and Kraay standard errors (DKSE) models. This study found that for SMBs, the issuance of WMPs has a positive and significant impact on the yields of new products, but there is no such significant relationship exists for large four banks.

Keywords: Wealth Management Products; Shadow Banking; Yields; Regulations; Panel data (search for similar items in EconPapers)
JEL-codes: C33 G21 G28 G32 (search for similar items in EconPapers)
Date: 2020-11-13
New Economics Papers: this item is included in nep-ban
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Published in International Journal of Management (IJM) 11.11(2020): pp. 586-596

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:104147

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