Shadow banking fading away
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.