Does China Have A Major Shadow Banking Problem?

China’s shadow banking troubles may be causing more hand-wringing than usual in the wake of a likely fund product default, but the problem may not be nearly as systemic as analysts believe.

“I don’t think it’s as systemic and alarming as sometimes it’s made out,” said Bill Maldonado, chief investment officer for Asia at HSBC. “It’s an area of concern,” he told CNBC, but he added that the risks are exaggerated.

“It gets called shadow banking and that has negative connotations,” he noted. “It sounds like it’s an operation that’s under the radar, that’s not overseen by regulators. And that’s just not true. The trust banks are overseen. The banks that sell the products are overseen. It’s a regulated activity.”


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu