The Rise of China's Shadow Banking System

Zheng Song () and Kinda Hachem

No 931, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: Shadow banking in China has grown very rapidly during the past decade. This paper studies the causes and impending consequences. We begin by documenting important differences in the cross-section of Chinese banks to isolate the regulatory triggers for shadow banking. We then build a model that rationalizes the facts and use it to conduct policy experiments. We find that asymmetric competition between banks is both a short-run stabilizer and a long-run risk, with new regulations potentially exacerbating the tipping point.

Date: 2015
New Economics Papers: this item is included in nep-ban, nep-cna and nep-tra
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:931

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