穆迪-Q3中国影子银行季度监测-中国-银行业--20171113-MOODY’S-Quarterly_China_ShadowBanking_Monitor_60页-2mb

Quarterly China Shadow Banking Monitor Summary

Core Content

The Quarterly China Shadow Banking Monitor provides an analysis of the shadow banking sector in China during the first half of 2017, highlighting the effects of regulatory measures, credit trends, and evolving financial structures. The report outlines the slowdown in shadow banking growth, the resilience of core shadow banking components, and the implications of liquidity conditions and regulatory changes on the financial system.

Main Points

1. Shadow Banking Growth Halts

• Shadow banking assets grew only slightly in H1 2017, reaching RMB64.7 trillion, compared to RMB64.4 trillion at end-2016.
• Shadow banking as a percentage of GDP declined to 82.6% in June 2017, the first drop since 2012.
• The decline was primarily driven by reduced issuance of wealth management products (WMPs) and asset management plans by banks and non-bank financial institutions (NBFIs).

2. Core Shadow Banking Remains Strong

• Core shadow banking, which is included in total social financing (TSF), continued to grow, with entrusted loans, trust loans, and undiscounted bankers’ acceptances showing acceleration.
• The share of core shadow banking in the broader sector increased marginally, indicating a shift toward more regulated components.

3. Credit Demand from the Real Economy

• Despite regulatory tightening, credit demand from the real economy remains strong.
• Bank lending and corporate bond issuance continue to meet this demand.
• Corporate bond issuance increased in Q3 2017, raising the share of direct financing in TSF to its highest level in 2017.

4. Liquidity Conditions and Regulatory Impact

• The People's Bank of China (PBOC) maintains a "moderate and neutral" monetary policy stance.
• A targeted reduction in the reserve requirement ratio (RRR) of 50–150 basis points was announced for qualified banks in late September 2017, effective in January 2018.
• Interbank NCD rates remain elevated, indicating tight liquidity for small and midsize banks.
• New NCD issuance reached a record high of RMB2.2 trillion in September 2017, suggesting rollover pressure.

5. Regulatory Measures and Their Effects

• Regulatory crackdowns have curbed the growth of WMPs, reducing their share in shadow banking assets from 47% at end-2016 to 43% in June 2017.
• The MPA framework and restrictions on NBFIs have reduced regulatory arbitrage and interconnectedness between banks and shadow finance.
• The trust sector has emerged as a more prominent channel for shadow credit, with trust loans growing significantly.

6. Challenges and Risks

• Systemic risks remain due to the complex and opaque funding chains.
• Consumer loans have attracted regulatory attention due to their growth and potential misuse.
• Household leverage continues to expand, raising concerns about financial stability.
• Shadow credit is not easily replaceable by formal bank credit, especially for SMEs and overcapacity sectors.

7. Trends in Shadow Banking Composition

• WMPs have declined in both outstanding balance and market share, with a shift toward equity-like products and other asset classes.
• Interbank investors have reduced their share in WMP holdings, while individual investors have increased.
• Trust sector has become a more significant player, but its exposure to real estate and overcapacity sectors has raised regulatory concerns.

8. Impact on Banks

• Small and midsize banks have reduced reliance on wholesale funding and increasingly depend on central bank liquidity.
• Investment receivables of listed banks have declined, but regional banks have shown growth.
• Liquidity management by the PBOC has helped stabilize the financial system, but contagion risks persist.

Key Information

• Shadow banking assets: RMB64.7 trillion in H1 2017.
• Core shadow banking: Composed of entrusted loans, trust loans, and undiscounted bankers’ acceptances.
• WMPs: Outstanding balance fell to RMB28.4 trillion in June 2017.
• NCDs: New issuance hit a record RMB2.2 trillion in September 2017.
• Regulatory focus: On WMPs, asset management plans, and trust sector exposures.
• Monetary policy: PBOC's "moderate and neutral" stance and liquidity injections through reverse repos, SLF, MLF, and PSL.
• Financial system risks: Increased due to opaque funding chains, maturity mismatches, and regulatory arbitrage.

Conclusion

While regulatory efforts have successfully curbed the growth of shadow banking, particularly WMPs, core shadow banking continues to expand. The PBOC's liquidity measures have helped reduce reliance on wholesale funding for small and midsize banks, but systemic risks remain. The trust sector and corporate bond market are key areas of focus for regulators, and the real economy still benefits from shadow credit. The complexity and opacity of the sector continue to pose challenges for financial stability.