China getting tougher on shadow banking

Government to publish a regional breakdown of financing flows that measures total corporate fundraising.

The People's Bank of China, the central bank, will soon publish regional data on total social financing or TSF, an indicator designed to measure overall corporate fundraising.

Analysts said the addition of the regional breakdown seems to be an attempt to track trends in nonbank finance or the shadow banking market in greater detail. TSF includes several items commonly viewed as shadow banking, including trust loans and company-to-company loans.

"Starting 2013, the central bank will not only publish national TSF, but also regional TSF," said deputy PBOC governor, Pan Gongshend.

TSF hit a record high of US$2.5 trillion in 2012 and could reach another record high in 2013.

Analysts are concerned that the growth of lightly regulated shadow banking market is creating hidden risks in China's financial system.

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