What Prompted Shadow Banking in China? Wealth Management Products and Regulatory Arbitrage

• 발행기관: 한국유통과학회
• 저자명: Syed Mehmood Raza SHAH Jianjun LI Qiang FU
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.12, 63~72쪽, 전체 10쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.12.30

영문 초록

Shadow banking in China has been growing rapidly; banks use wealth management products aggressively to evade regulatory constraints. The loan-to-deposit ratio or LDR targets both sides of the balance sheet; loans in terms of asset-side, and deposits in terms of liabilitiesside; banks needed to control and maintain both sides. Regulators restricted Chinese banks to maintain a 75% limit for their loan-depositratio. Banks’ needed to either lower their loans or increase the deposits; WMPs helped banks to evade this limit. Banks issue more WMPs to control and manage a 75% statutory ceiling LDR. This WMPs-LDR positive association disappeared post-2015 period. This study empirically examined how Chinese banks use WMPs issuance to avoid regulatory constraints. Quarterly panel data for 30 top Chinese banks were used by analyzing pre-2015 (during the 75% LDR limit) and post-2015 (after removal of the LDR limit). This study also performed fixed-effects model as recommended by the Hausman specification test, with feasible generalized least squares FGLS estimation technique. The results of this study show that for the pre-2015 period, Chinese banks use issuance of WMPs aggressively to manage their LDR limit; this WMPs-LDR relationship disappeared post-2015 period. Moreover, SMBs use WMPs more eagerly as compare to Big4 banks.

목차

1. Introduction

2. Literature Review

3. Data and Empirical Methodology

4. Results and Discussion

5. Conclusion

References

키워드

Wealth Management Products Shadow Banking Loan-To-Deposit Ratio LDR Regulations Panel Data