Template-Type: ReDIF-Paper 1.0
Author-Name: Guofeng Sun
Author-X-Name-First: Guofeng
Author-X-Name-Last: Sun
Title: China's Shadow Banking: Bank's Shadow and Traditional Shadow Banking
Abstract: Banks' shadow, or money creation by banks beyond traditional loans, plays an important role in China's money-creation process, posing a number of challenges to monetary policy operations and financial risk management. This paper analyzes the money-creation mechanisms of China's shadow banking sector in detail, provides accurate measurements, investigates its effects on financial risk, and surveys recent regulation. To strengthen supervision, China's regulators should closely track the evolution of various shadow banking channels, both on- and off-balance sheet. Specific macroprudential regulation tools, such as asset reserves and risk reserves, should be applied separately to banks' shadow and traditional shadow banking.
Length: 47 pages
Creation-Date: 2019-11
File-URL: https://www.bis.org/publ/work822.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work822.htm
File-Format: text/html
Number: 822
Classification-JEL: E44, E51, G28
Keywords: banks' shadow, traditional shadow banking, credit money creation, bank accounting, regulation
Handle: RePEc:bis:biswps:822