China's shadow banking risk shifts to booming bond market
New corporate bond issuance leap to 914b yuan for Q3, or 29% of all new credit
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Shanghai
A YEAR after China's financial regulators squared up to the systemic perils of "shadow banking", the threat is shifting to a booming corporate bond market, and risky borrowers' debt is finding its way into products aimed at retail investors.
An opaque network of trust companies and non-bank lenders had grown their annual market to a hefty 2.9 trillion yuan (S$641 billion) in loans before regulators stepped in, spooked by rising defaults on wealth-management products (WMPs) backed by such high-interest shadow lending.
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