Guess no one wants to show much Red China on the books come Friday. Starting early by the looks of things. Guess shadow banking and the Fact Liwa has a bunch of cash stuck all over the country is a little concerning. So even if you got the cash, maybe an insolvent bank lowned it out. Is that how this works? Kind of like the US banks?
They also have the FDIC program over there. Shadow banking are mostly trust companies performing loan sharking on behalf of the wealth companies or individual to earn double digit return on their investment. The new trend that China wants to crack down is smaller bank selling their commercial loan to these trust companies to get the loan off their book so that they can do more loan. These trust will repackage these loans and bundle up with their higher risk loans and create some kind of high yield instruments to see them to the public. Some aggressive one like Mengsing has been borrowing through interbank low loan rate to finance their high yield loan which government are cracking them down. Its size is like 1.6% of the total loan portfolio of China, small yet now is the time to do it & tell them who is in charge. Sky is not falling.