“Shadow banking”– is simply non-bank lending and borrowing. Investing in hedge funds, venture capital and private equity are all forms of “shadow banking”. There’s nothing wrong with this: shadow banking often helps individuals or businesses that would otherwise not qualify for conventional bank loans or get credit. Also, some shadow banking wealth management products offer lucrative returns. Shadow banking thrived in China with the liquidity that flooded the market in 2008, when its government pumped in a US$586bil (RM1,828bil) stimulus package in response to the subprime crisis. All this excess liquidity has, however, causing a housing bubble and also saved a number of underperforming Chinese state-owned enterprises from having to reform. At the same time, Chinese policymakers were debating long-standing calls for them to cool down their economy – a fateful decision as we will see later.right-waystan.blogspot/2013/07/worries-over-systemic-risks-of-shadow.html
Posted on: Tue, 23 Jul 2013 07:08:37 +0000
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