BUSINESS China to halt the resurgence of shadow banking: regulator


China to halt the resurgence of shadow banking: regulator

Global Times

17:18, June 11, 2021

File photo: VCG

China should strictly guard against the resurgence of shadow banking, China’s banking regulator said at the Lujiazui Forum on Thursday.

China should strictly prevent the resurgence of shadow banking, as China’s high-risk shadow banking is different from the ones in other countries, which has the typical “in-system” and “credit like” characteristics, Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission, said during a video speech at the Lujiazui Forum.

The size of the sector is still large and easy to rebound with a slight chance even after the scale of China’s shadow banking dropped by $3.13 trillion from the historical peak after rectification, said Guo.

It is important to prevent financial institutions from adding leverage disorderly through cross-fiscal products again, and various “credit-alike” of new patterns should be contained in the initial stage, according to Guo, noting that new regulations on capital management should be conscientiously implemented to ensure a smooth rectification of existing capital management products.

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