The Business Times
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Shadow banking crackdown seen needed to tame stocks in China

Published Wed, Jan 28, 2015 · 09:50 PM

Taipei

CHINA'S clampdown on borrowing for purchases of the world's most-volatile equities has missed shadow-banking activities that allow investors to take even greater risks.

Investors have ramped up bets on rallying shares by borrowing through structures known as "umbrella trusts", which allow for more leverage than brokerage financing. Goldman Sachs Group Inc estimated up to 500 billion yuan (S$108 billion) has entered stocks through wealth-management products (WMPs).

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