China can handle shadow banking threat


China can handle shadow banking threat

Fears that China is heading for a hard economic landing or even a systemic crisis because of problems in its shadow banking sector are exaggerated, says Louis Kuijs, RBS Chief China Economist.

Economic Analysis

24 April 2014

China and its financial system can handle the threat of shadow banking

Spectacular growth in credit has lifted China’s debt-to-GDP ratio to 210% and loan quality has worsened increasing the risk of defaults. Foreign media have seized on predictions that shadow banking will lead to China’s own ‘Lehman moment’ China’s first real bond default and high-profile bailouts for two shadow banking investments have contributed to that view.

But Kuijs does not believe these events will lead to a systemic crisis. Despite its reputation, large swathes of the shadow banking sector appear to be relatively low risk and he argues that China – and its financial system – can handle the threat.

Read his full article on RBS Insight

Tagged

2014

Latest news

Women and millennials help drive £17bn+ franchise sector to record levels

New research from NatWest and the British Franchise Association (bfa) highlights changes and profitability in the sector.

Winners announced for Skills & Opportunities Fund

52 winning organisations have been announced for round two of the 2018 Skills & Opportunities Fund.

RBS Multicultural Network meets Eric Holder, 82nd US Attorney General

Simon McNamara, RBS Chief Administrative Officer and Executive Sponsor of the RBS Multicultural Network, recently hosted an event in discussion with Eric Holder, the first black US Attorney General. They discussed career, ethnicity, diversity and even a little bit of politics. At the event, Eric Holder shared his wisdom and experience with attendees from the RBS Executive committee and RBS Multicultural Network. Simon McNamara blogs about his experience meeting Eric, a BAME role model, and why diversity is so important to RBS.

Set Tab for lightbox