Does China Have A Major Shadow Banking Problem?

China’s shadow banking troubles may be causing more hand-wringing than usual in the wake of a likely fund product default, but the problem may not be nearly as systemic as analysts believe.

“I don’t think it’s as systemic and alarming as sometimes it’s made out,” said Bill Maldonado, chief investment officer for Asia at HSBC. “It’s an area of concern,” he told CNBC, but he added that the risks are exaggerated.

“It gets called shadow banking and that has negative connotations,” he noted. “It sounds like it’s an operation that’s under the radar, that’s not overseen by regulators. And that’s just not true. The trust banks are overseen. The banks that sell the products are overseen. It’s a regulated activity.”

CNBC

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