SHADOW BANKING SYSTEMS IN THE UNITED STATES AND CHINA
SHADOW BANKING SYSTEMS IN THE UNITED STATES AND CHINA

Author(s): SARA HSU, Jianjun LI
Subject(s): Economy, Business Economy / Management, Accounting - Business Administration
Published by: ASERS Publishing
Keywords: shadow banking, crisis; informal finance; China
Summary/Abstract: The US and Chinese shadow banking systems are vastly different, but both present a potential threat to the economy. For the US, the shadow banking system is large and an increasingly integral part of the financial sector. For China, regulations are helping to curb bad behavior, but fast growth of new, unregulated instruments or aspects of the informal financialsector may present a problem. The kaleidoscopic Chinese economy is extremely difficult to regulate but essential to control, particularly since it is closely interconnected with the rest of the world economy. In this chapter, we compare the American and Chinese shadow banking systems in terms of scale, nature, and potential risk, making policy recommendations for each.

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