Shadow banking prompts concerns in China

04/8/2013 | Reuters

The nonperforming-loan ratio of China's banking system fell as economic growth slowed last year, leading to questions about the health of the shadow-banking system of trust companies, brokerages and insurers, to which banks might be shifting such loans, observers say. "These [bank] loans are not being repaid by the borrowers; they're being repaid by investors in the [wealth-management] products," said Charlene Chu of Fitch Ratings. "So we really can't see what the true corporate repayment rate is."

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