Underground finance – the pressure tells

• Published 03 Jun 2010

Negative real deposit rates are boosting the informal banking sector, creating headaches for regulators and straining banks. Will regulators be forced to raise deposit rates?

Depositors in Chinese banks are clear on one tragic fact – their savings are burning up. With the one-year deposit rate at 2.25% and the Consumer Price Index (CPI) predicted to rise above 3% year on year in May (see Big Call), every minute that you leave your savings in the bank is a minute longer in the value incinerator.

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Other Articles on this Issue

• Financial China

  Select financial charts

• Macro View

  Whither interest rates?

• The Big Call

  Food to drive inflation above target

• The Best of Chinese Commentators

  Property price conundrum

  Driving green

• Funds Data

  Managers spread net beyond China

• Consumer China

  Online games – big guys slaying little guys

  Perfect World – loyal customers spend more

  Tencent – a good mix

  Shanda Games – players spend less

  Netease – World of Warcraft comes at a cost

  Changyou – shrinking sales growth

• Capital Intensive China

  Will fixed asset investment growth slow?

• Guest Column

  Institutional investing in A-shares

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