Year: 2020
Type: article
Abstract: China's shadow banking has been rising rapidly in the last decade, mainly driven by regulations for banks, the Fiscal Stimulus Plan in 2008 and credit constraints in restrictive industries. This sector has continued growing although the regulators repeatedly attempted to impose new regulations on banks and nonbanks. The existence of shadow banking fulfills the high demand for funding. The standard view is that it poses risks to financial stability. However, in China, this is not necessarily the case. Entrusted loans, implicit guarantees from nonbanks, banks or government may provide a second‐best arrangement in funding risky projects and improving welfare.
Source: Manchester School
DOI: 10.1111/manc.12331
Authors: Franklin Allen, Xian Gu
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,500
OpenAlex ID: W3036477306