How China's shadow banks could slip in to crisis

ASIA

Global markets could be at risk if China allows its shadow banking sector to slip in to crisis, explains Emma Bullock from Saunderson House.

A full-blown financial crisis in China, triggered by its burgeoning shadow banking sector is the key risk to global financial markets.  Shadow banking loans During the last five years, shadow banking assets (those not recognised on bank balance sheets) have risen significantly and stand between RMB36trn-RMB46trn according to various data sources.  This figure includes wealth management products and trust loans, which offer investors a higher return than traditional bank deposits.  While many such assets are likely to be backed by treasury and corporate bonds, some appear to be...