China Shadow Banking Shifted to Insurers Alarms Moody’s
This article is for subscribers only.
A doubling in the trust holdings of China’s insurers has prompted ratings companies to warn the industry may be taking on too much shadow banking default-risk.
Insurers held 281 billion yuan ($46 billion) of trust products on June 30, surging from 144 billion yuan at the end of last year, China Insurance Regulatory Commission data show. The companies’ shadow bank assets, including wealth management products and other financing kept off commercial lenders’ balance sheets, reached 1.14 trillion yuan, or 13 percent of their investments, Standard & Poor’s estimated, adding that this made them “vulnerable in times of stress.”