Shadow Banking and Regulation in China and Other Developing Countries
19 Pages Posted: 18 Nov 2016 Last revised: 13 Jan 2017
Date Written: November 16, 2016
The rapid but largely unregulated growth in shadow banking in developing countries such as China can jeopardize financial stability. This article discusses that growth and argues that a regulatory balance is needed to help protect financial stability while preserving shadow banking as an important channel of alternative funding. The article also analyzes how that regulation could be designed.
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