A report released by regulator Financial Stability Board (FSB) on Monday revealed that Chinese shadow banking made up around 15% of the world’s risky non-bank loans, Bloomberg reports.
Of the $45.2 trillion in global shadow-banking assets linked to credit that could pose systematic risks, the FSB attributed $7 trillion to Chinese companies, according to data provided by China and Luxembourg.
In the report, the FSB said investment vehicles vulnerable to speculation and bubbles, such as credit hedge funds and money market funds, grew by an average of 13% over the past five years. Regulators have been keen to keep a close eye on such lending activity, which was a key factor in 2008’s financial crisis.
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