The Asia Global Payment Summit. Bali, Indonesia. 10-11 October 2019

Shadow Banking Assets in China Drop to Lowest Level Since 2016: Moody’s

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China’s shadow banking sector has been heavily squeezed by ongoing government pressure according to a new report from ratings agency Moody’s.

The report from Moody’s indicates that broadly defined shadow banking assets fell by almost 1.7 trillion yuan in the first half of 2019 to 59.6 trillion yuan, for their lowest level since the end of 2016.

According to the report an ongoing decline in asset management operations by both bank and non-bank financial institutions has been a key factor behind China’s shrinking shadow banking sector.

The report from Moody’s also highlighted a 10.1% YoY rise in loans to micro and small-enterprises in the second quarter of 2019, as compared to a moderation in total bank lending to the corporate sector.

According to the report the Chinese government is driving banks to step up lending to small private enterprises.

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