The Wild West of Bank Products
The chapter describes the importance of WMPs to banks and the relationship between bank WMPs and financial repression. WMPs rose from less than 4 trillion renminbi in 2010 to more than 17 trillion renminbi in 2014, and jumped another 57 percent to 23.5 trillion renminbi in 2015. In 2014, the biggest contributors to growth were the joint-stock or commercial banks, whose WMP balance rose 75 percent from 5.7 trillion renminbi to 9.9 trillion renminbi. The chapter explains the impact of the rise in WMPs to savings deposits in the formal banks. We include data on estimations of the concentration of wealth within the banks. It analyzes the breakdown on the distribution of WMPs by channel and describes bank earnings from Shadow Banking products.
KeywordsCommercial Bank Small Bank Bank Deposit State Bank Regulatory Arbitrage
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