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Shadow banking in China compared to other countries

Allen, Franklin; Gu, Xian

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Authors

Franklin Allen

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Dr Xian Gu xian.gu@durham.ac.uk
Associate Professor in Finance



Abstract

China's shadow banking has been rising rapidly in the last decade, mainly driven by regulations for banks, the Fiscal Stimulus Plan in 2008 and credit constraints in restrictive industries. This sector has continued growing although the regulators repeatedly attempted to impose new regulations on banks and nonbanks. The existence of shadow banking fulfills the high demand for funding. The standard view is that it poses risks to financial stability. However, in China, this is not necessarily the case. Entrusted loans, implicit guarantees from nonbanks, banks or government may provide a second‐best arrangement in funding risky projects and improving welfare.

Citation

Allen, F., & Gu, X. (2021). Shadow banking in China compared to other countries. Manchester School, 89(5), 407-419. https://doi.org/10.1111/manc.12331

Journal Article Type Article
Acceptance Date May 21, 2020
Online Publication Date Jun 21, 2020
Publication Date Aug 31, 2021
Deposit Date Jul 8, 2020
Publicly Available Date Jul 8, 2020
Journal Manchester School
Print ISSN 1463-6786
Electronic ISSN 1467-9957
Publisher University of Manchester
Peer Reviewed Peer Reviewed
Volume 89
Issue 5
Pages 407-419
DOI https://doi.org/10.1111/manc.12331
Public URL https://durham-repository.worktribe.com/output/1261192

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Published Journal Article (Advance online version) (315 Kb)
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Publisher Licence URL
http://creativecommons.org/licenses/by/4.0/

Copyright Statement
Advance online version © 2020 The Authors. The Manchester School published by The University of Manchester and John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.





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