Moody's: China's shadow banking sector falls further amid regulatory tightening

Dhwani Mehta FXStreet

Moody’s Investors Service underscores the key threats to China’s shadow banking sector, as the authorities continue to lower systemic risks.

Key quotes

“Shadow banking assets as a share of nominal GDP fell in Q1 2021 to the lowest in eight years.”

“Economy-wide leverage to stabilize as authorities aim for a credit growth rate that matches nominal GDP growth.”

“Moody's measure of the economy-wide leverage ratio declined in the first quarter of 2021.”

“The ratio is set to decline and stabilize in 2021 amid the steady economic recovery and a less accommodative credit environment, as the Chinese government targets a rate of credit growth that matches nominal GDP growth.”

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