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Paul McCulley of investment management firm PIMCO coined the term "shadow banking". [9] Shadow banking is sometimes said to include entities such as hedge funds, money market funds, structured investment vehicles (SIV), "credit investment funds, exchange-traded funds, credit hedge funds, private equity funds, securities broker-dealers, credit insurance providers, securitization and finance ...
The shadow banking industry, broadly defined, reached $12 trillion in total size, accounting for 86% of China’s GDP in 2019, according to a report published by the country’s top banking ...
Shadow banks typically provide financing through off-balance-sheet activities or via non-bank financial institutions, such as trust firms. A mysterious and enormous part of China’s financial ...
Traditionally, banks keep everything on their balance sheet and owners of the bank have to hold a certain amount of equity to meet the capital requirement. This means if a bank wants to invest in a large new project, i.e. increase its asset largely, it has to increase owners' equity proportionality. Moving such project off bank's balance sheet ...
OFCs, however, have expanded into a related area to shadow banking, which is asset securitisation. Unlike traditional shadow banking, where the OFC bank needs to access a pool of offshore capital to operate, securitisation involves no provision of capital. OFC securitisation involves the provision of legal structures, registered in the OFC ...
The reports come two weeks after Zhongzhi Enterprise Group, another major shadow bank, declared itself “insolvent” after missing payments to its investors. Zhongzhi is currently at the center ...
They are considered to be part of the non-bank financial system, which has two parts, the shadow banking system comprising the "bank sponsored" SIVs (which operated in the shadows of the bank sponsors' balance sheets) and the parallel banking system, made up from independent (i.e. non-bank-aligned) sponsors.
China's shadow banking industry is estimated to be worth around $3 trillion and Beijing has been trying to clamp down on the sector. At its peak, Zhongzhi controlled assets of more than 1 trillion ...