• Fri
  • Jul 11, 2014
  • Updated: 12:18am

Shadow Banking

Rural mini-bank run highlights perils of deregulation in China

Depositors wanting to withdraw money from a rural bank in prosperous Jiangsu province before the Lunar New Year holiday found the doors locked, their money gone and employees offering a simple explanation.

Friday, 7 March, 2014, 12:39am

Mainlanders use ‘free money’ from Hong Kong banks to earn higher returns at home

Mainland Chinese working in Hong Kong have found a way to use “free money” from local banks to invest in profitable financial products across the border.

They take advantage of cheap personal loans aggressively hawked by banks in an attempt to expand their business. The borrowers quietly turn around and invest the cash on the mainland for higher returns.

27 Feb 2014 - 12:42am 8 comments

Investors' funds at risk as trust product sold by CCB defaults

A high-yield investment product backed by a loan to a debt-ridden coal company failed to repay investors when it matured on Friday, state media reported yesterday, in the latest sign of financial stress in the mainland's shadow banking sector.

14 Feb 2014 - 5:17pm

Near-default must spur action on China's shadow banking sector

On the eve of the Lunar New Year, news that a default on a 3 billion yuan (HK$3.8 billion) trust product had been averted brought relief to some in China. This was the trust industry's most serious crisis to date. The danger may have passed for now, but the last-minute bailout has shone a light on the growing risks lurking in the country's shadow banking sector.

13 Feb 2014 - 1:57am 1 comment

Troubled shadow bank product tests no-default policy in China

A high-yielding investment product based on a loan to an indebted coal company is offering the latest test of Beijing's willingness to permit defaults in the mainland's shadow banking system.

17 Jan 2014 - 12:58am

In the shadows, the quickness of the loan deceives the eye

Want a crash course on shadow banking on the mainland? There is no better place to start than China Chengtong Development. It is a Hong Kong-listed company. Everything you are going to read here comes from its annual reports and announcements. For so-called shadow banking does not happen in the shadows.

8 Jun 2013 - 3:39am

The real problem behind China's shadow banking

In China today, the term "shadow banking" has a negative meaning. Over the past year, the China Banking Regulatory Commission has issued numerous policy directives to try to contain its explosive growth. Xiao Gang , the head of the Chinese securities watchdog, called shadow banking "a Ponzi scheme" in an opinion piece he penned last year while still serving as chairman of the Bank of China.

31 May 2013 - 5:35am 1 comment

Illuminating confessions from a shadow banker

Everyone knows China's shadow banking market is big. According to the ratings agency Moody's, the shadow market was worth 20.5 trillion yuan (HK$25.9 trillion) at the end of last year, or 39 per cent of China's gross domestic product.

15 May 2013 - 4:01am 4 comments

Shadow banking expansion to brake

Shadow banking on the mainland is likely to grow at a slower pace, but the sector remains a key source of funds for smaller companies, rating agency Moody's Investors Service said.

14 May 2013 - 4:27am 1 comment

'Shadow banking' expands as Hong Kong brokers lend to Chinese businessmen

Many Hong Kong brokerages have a new and profitable business, despite the economic downturn: lending money to mainland entrepreneurs at high interest rate, sometimes more than 30 per cent.

Such private financing activities are a new and fast-growing business for many mid-sized and large local brokerages in the city.

13 May 2013 - 7:58pm 5 comments

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