Still in the Shadows
Unregulated cash continues swirling through China’s “shadow banking” system.
Following years of off-balance-sheet lending to pump up the economy’s overall credit growth, the China Banking Regulatory Commission (CBRC) has been trying to rein in the runaway expansion of “shadow loans.”
One of the regulator’s policies is limiting commercial banks’ investment in “nonstandard credit assets.” These are repackaged loans traded outside the interbank bond market and stock exchanges. However, one type of nonstandard credit asset — credit beneficiary rights — somehow managed to escape regulatory oversight.
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