Chart of the Week: Shadow banking in China more than doubled since 2012

Shadow banking assets reached US$9.5t in 2016, but growth is finally slowing down.

The pace of shadow banking growth is still considered to be rapid, but it has seen a slowdown from the 30% rate recorded in 2015. According to Moody's estimates, shadow banking assets grew by over 20% in 2016 to reach RMB 64 trillion (US$9.5t), equivalent to 86.5% of GDP. 

"We estimate the difference between our broad measure of shadow banking and the portion captured by TSF to be nearly RMB 23 trillion at end-2016 (vs. RMB 17 trillion at end-2015), or 35% of total shadow banking assets. In the Financial Stability Report released on July 4, authorities for the first time have acknowledged the existence of the shadow credit not captured by TSF, underscoring the challenges on regulating the broad shadow banking sector," added Moody's.