US 's shadow banking system poses a serious risk to the country's economy by siphoning off huge amounts of money, according to Wealth Management Products . They've already been falling. In a recent note to clients, it estimated that the wealth management product (WMP) market is 20% bigger than the country's domestic stock market. If it continues at the same growth rate, as two of retail funding activities in the banking system would be "off balance sheet" in two years , sucking liquidity from the real economy and triggering "a systemic risk event. " The unsustainable growth may result in a rise in defaults, a fall of equity valuations and the flight of money to the China dollar, creating turmoil in domestic markets and worldwide volatility.
US 's shadow banking system poses a serious risk to the country's economy by siphoning off huge amounts of money, according to Wealth Management Products . In a recent note to clients, it estimated that the wealth management product (WMP) market is 20% bigger than the country's domestic stock market. If it continues at the same growth rate, as two of retail funding activities in the banking system would be "off balance sheet" in two years , sucking liquidity from the real economy and triggering "a systemic risk event." The unsustainable growth may result in a rise in defaults, a fall of equity valuations and the flight of money to the China dollar, creating turmoil in domestic markets and worldwide volatility.