From the Pacific Exchange Blog
The development of an offshore bond market, colorfully referred to as dim sum bonds, is an important pillar of China’s strategy to make the renminbi a global currency. However, like other aspects of renminbi internationalization, the growth of the offshore bond market has been halting and uneven.
Shadow banking has grown quickly in China, driven by regulatory arbitrage and the growing role of non-bank financial institutions in the financial sector. In this episode of Pacific Exchanges, we sat down with our colleague Cindy Li to discuss her recent paper on shadow banking in China.
Even the best financial regulation can be undone by faulty or inaccurate financial reporting. Accounting regulatory regimes, which include auditor oversight, are critical in ensuring that the plumbing of the financial system works and ultimately the stability of the economy.
This Asia Focus explores the drivers behind shadow banking system’s growth in China, reviews the changing pattern of shadow banking activities, analyzes associated risks in the context of China’s growing capital markets, and discusses future regulatory challenges.