22 Jan 2014
Flash: More evidence of the high-risk on China's shadow banking business - Nomura
FXstreet.com (Bali) - Nomura reports on three peer-to-peer (P2P) internet lending platforms (important part of shadow banking) being out of business recently, with the bank now expecting more of these cases to occur.
Key Quotes
"According to the Chinese-language newspaper National Business Daily (NBD), three peer-to-peer (P2P) internet lending platforms, i.e. Hangzhou Guolin Chuangtou (HZGC), Shenzhen Zhongdai Xinchuang (SZZX), and Shanghai Fengyi Xintou (SHFX), have closed recently, as their final owner, Zhen Xudong, has run away."
"The internet lending platform has grown rapidly since the first P2P internet lending platform was established in 2007. It has reached over 2,000 platforms now, according to China Daily, and has become an important part of shadow banking."
"As it lacks sufficient supervision and information disclosures, it involves very high-risk loan business and also fraudulent activities sometimes. We expect more of these cases to occur with a further clampdown by the authorities on internet-lending platform activities."
Key Quotes
"According to the Chinese-language newspaper National Business Daily (NBD), three peer-to-peer (P2P) internet lending platforms, i.e. Hangzhou Guolin Chuangtou (HZGC), Shenzhen Zhongdai Xinchuang (SZZX), and Shanghai Fengyi Xintou (SHFX), have closed recently, as their final owner, Zhen Xudong, has run away."
"The internet lending platform has grown rapidly since the first P2P internet lending platform was established in 2007. It has reached over 2,000 platforms now, according to China Daily, and has become an important part of shadow banking."
"As it lacks sufficient supervision and information disclosures, it involves very high-risk loan business and also fraudulent activities sometimes. We expect more of these cases to occur with a further clampdown by the authorities on internet-lending platform activities."