Shadow Banking and Systemic Risk in Europe and China
AbstractWe compare the European and Chinese shadow banking systems. While the European shadow banking system is better developed than the Chinese shadow banking system, herd behavior and other factors in European markets create systemic risk, which contributed in part to the financial crisis. Dispersion of risk across the "under-developed" shadow banking system in China has led to some cases of localized, concentrated risk, but not to systemic risk. We discuss proposed European shadow banking regulation and its implications for systemic risk, and discuss what lessons China might glean from such policies. We also discuss what lessons China's diverse and systemically uncoordinated shadow banking sector might provide for Europe.
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Bibliographic InfoPaper provided by Department of International Politics, City University London in its series CITYPERC Working Paper Series with number 2013-02.
Date of creation: 2013
Date of revision:
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Postal: Department of International Politics, Social Sciences Building, City University London, Whiskin Street, London, EC1R 0JD, United Kingdom
Phone: +44 (0)20 7040 8500
Web page: http://www.city.ac.uk/arts-social-sciences/international-politics/
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-16 (All new papers)
- NEP-BAN-2013-03-16 (Banking)
- NEP-TRA-2013-03-16 (Transition Economics)
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