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Financial Regulation

New bank deposit rules could squeeze shadow finance

Chinese banking authorities have issued new rules to curb the artificial inflation of deposits at the end of each month or quarter. The new regulations could significantly reduce banks’ exposure to shadow finance, likely squeezing their finances and lending capacity. However, we are unsure how effectively the new regulations will be enforced.

15 September 2014

The cash crunch

DANWEI – Chinese online forums have been buzzing with rumors and theories about last week’s cash crunch, the reasons for the central bank’s liquidity squeeze and what it means for business and the economy. This week’s Danwei Bulletin looks at one story connected to the squeeze: reports of Ping An investing heavily in Wealth Management Products (WMPs).

27 June 2013

Liquidity tensions remain high despite Shibor fall

Despite a decline in interbank lending rates from record highs, there are few clear signs that the central bank is bowing to pressure to inject liquidity.

21 June 2013

Liquidity crunch reveals rising policy tensions

Current tight liquidity within China’s financial system is due to regulations aimed at clamping down on the thriving Rmb-dollar carry trade and limiting banks’ investments in trusts, with the central bank extremely reluctant to intervene to alleviate the liquidity crunch. Mounting pressure may force it to act against its will, however.

18 June 2013

Opening up China’s capital account

Economists and analysts have been assessing the likelihood and the likely impact of capital account liberalisation by the new Chinese leadership.

16 May 2013

The great escape

Recent moves by regulators reveal the outlines of a strategy to avoid a potential financial crisis, while keeping financing relatively robust in 2013.

04 April 2013

China expands short-selling scheme

An expanded short-selling programme could inject some life into China’s lacklustre equities market.

07 March 2013

Reform watch

While it is still too early to gauge the outlook for reform under the new leadership, there have already been several important statements and a few key moves.

24 January 2013

Worries mount over wealth-management products

A dispute over a non-performing wealth-management product sold by Huaxia Bank has highlighted growing concerns over the risks associated with these increasingly popular but extremely opaque financial products.

13 December 2012

US-listed Chinese firms under more pressure

Accusations leveled against the China subsidiaries of five global auditors have reignited concerns over the future outlook for US-listed Chinese companies.

13 December 2012

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