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Wealth Management Products in China

Author

Listed:
  • Emily Perry

    (Reserve Bank of Australia)

  • Florian Weltewitz

    (Reserve Bank of Australia)

Abstract

Wealth management products (WMPs) in China are investments that offer fixed rates of return well above regulated interest rates for deposits and are often used to fund investments in sectors where bank credit is restricted. They are typically actively managed by banks, with other firms commonly used as ‘channels’, but few are recorded on banks’ balance sheets. A key concern about such products is the moral hazard created by a history of banks bailing out unguaranteed WMPs.

Suggested Citation

  • Emily Perry & Florian Weltewitz, 2015. "Wealth Management Products in China," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 59-68, June.
    • Handle: RePEc:rba:rbabul:jun2015-07
    as

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    File URL: https://www.rba.gov.au/publications/bulletin/2015/jun/pdf/bu-0615-7.pdf
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    Citations

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    Cited by:

    1. Feng, Xu & Lütkebohmert, Eva & Xiao, Yajun, 2022. "Wealth management products, banking competition, and stability: Evidence from China," Journal of Economic Dynamics and Control, Elsevier, vol. 137(C).
    2. Torsten Ehlers & Steven Kong & Feng Zhu, 2018. "Mapping shadow banking in China: structure and dynamics," BIS Working Papers 701, Bank for International Settlements.
    3. Huang, Jin & Jin, Yong & Duan, Yang & She, Yanling, 2023. "Do Chinese firms speculate during high economic policy uncertainty? Evidence from wealth management products," International Review of Financial Analysis, Elsevier, vol. 87(C).
    4. Hu, Jiafei & Yuan, Haishan, 2021. "Interest arbitrage under capital controls: Evidence from reported entrepôt trades," Journal of Banking & Finance, Elsevier, vol. 127(C).
    5. Xu, Xiaoqing Eleanor, 2021. "Dissecting the segmentation of China's repo markets," Pacific-Basin Finance Journal, Elsevier, vol. 70(C).
    6. Rongrong Sun, 2021. "Requiem for the interest rate controls in China," Pacific Economic Review, Wiley Blackwell, vol. 26(2), pages 139-160, May.
    7. Shaghil Ahmed & Ricardo Correa & Daniel A. Dias & Nils M. Gornemann & Jasper Hoek & Anil K. Jain & Edith X. Liu & Anna Wong, 2019. "Global Spillovers of a China Hard Landing," International Finance Discussion Papers 1260, Board of Governors of the Federal Reserve System (U.S.).
    8. Kerry Liu, 2018. "Why Does the Negotiable Certificate of Deposit Matter for Chinese Banking?," Economic Affairs, Wiley Blackwell, vol. 38(1), pages 96-105, February.
    9. Russell Cooper & Guozhong Zhu, 2017. "Household Finance in China," NBER Working Papers 23741, National Bureau of Economic Research, Inc.
    10. Cao, June & Tu, Guoqian, 2023. "A close look at wealth management products from the Buyer's perspective: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 494-506.
    11. Jyh-Horng Lin & Shi Chen & Fu-Wei Huang, 2018. "Bank Interest Margin, Multiple Shadow Banking Activities, and Capital Regulation," IJFS, MDPI, vol. 6(3), pages 1-20, July.
    12. Jo, Yonghwan & Kim, Jihee & Santos, Francisco, 2022. "The impact of liquidity risk in the Chinese banking system on the global commodity markets," Journal of Empirical Finance, Elsevier, vol. 66(C), pages 23-50.
    13. Park, Heungju & Sohn, Sungbin, 2021. "Flight to quality and implicit guarantee: Evidence from Chinese trust products," International Review of Economics & Finance, Elsevier, vol. 75(C), pages 399-419.

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