But first, let's clarify what we mean by shadow banking. China's shadow banking system poses a serious risk to the country's economy by siphoning off huge amounts of money, according to HSBC. In a recent note to clients, it estimated that the wealth management product (WMP) market is 24% bigger than the country's domestic stock market. If it continues at the same growth rate, as much as a third 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 WMP market has been growing rapidly over the past few years but HSBC said its research shows there are signs that this may have peaked.
China's shadow banking system poses a serious risk to the country's economy by siphoning off huge amounts of money, according to HSBC. In a recent note to clients, it estimated that the wealth management product (WMP) market is 24% bigger than the country's domestic stock market. If it continues at the same growth rate, as much as a third 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 WMP market has been growing rapidly over the past few years but HSBC said its research shows there are signs that this may have peaked.