Shadow bank­ing fad­ing away

China Daily (USA) - - BUSINESS -

China has made head­way in rein­ing in its shadow-bank­ing sec­tor, Fitch has said in a re­port, with risk con­trol in the fi­nan­cial sys­tem a pri­or­ity since the be­gin­ning of the year. The rat­ing agency be­lieves the sec­tor has be­come smaller in re­sponse to a reg­u­la­tory clam­p­down which be­gan early this year. In­ter­bank as­sets, a ma­jor car­rier of shadow-bank­ing ac­tiv­i­ties, fell 13.8 per­cent year-on-year at the end of Au­gust, while in­ter­bank li­a­bil­i­ties went down 1.6 per­cent, ac­cord­ing to the China Bank­ing Reg­u­la­tory Com­mis­sion. It was the first time since 2010 that the two in­di­ca­tors dropped at the same time, Fitch said, adding that joint­stock com­mer­cial banks, which had been more brisk in in­ter­bank ac­tiv­i­ties, saw the sharpest de­cline. Growth of wealth man­age­ment prod­ucts con­tin­ued to slow. Fitch es­ti­mated the out­stand­ing WMP bal­ance to have de­clined by around 10 per­cent this year. Shadow bank­ing, which takes place out­side reg­u­la­tory scope, re­mains a key source of risks to fi­nan­cial sta­bil­ity fol­low­ing years of rapid growth.

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