In addition to carefully explaining how the financial sector maneuvered itself into the financial crisis of 2007–08, The End of Banking presents several unconventional ideas to do away with regulatory capital arbitrage that sticks taxpayers with the bill for bankers’ risk taking. It also promises a fairly straightforward policy framework that proposes to reduce shadow banking, decentralize financial services from too-big-to-fail banks, improve regulation, and realign the private and the public sector with transparent monetary policy.
Why have some private banks in the Asia Pacific region grumbled about profit? Paul Smith, CFA, managing director, Asia Pacific global head, institutional partnerships, at CFA Institute, says it’s because private wealth business models in the region are not connecting with the needs of local clients.
Nobel laureate Robert Engle discusses the development of the ARCH model, the global financial crisis, systemic risk, and forecasting liquidity with ARCH models.
No doubt shadow banking in China is large (30% of total banking assets, according to JPMorgan’s estimates) and carries unknown risks. But China’s problem is not shadow banking itself, it is a dysfunctional credit system.
With around 10,000 projects now in progress throughout the country, “the urbanization process in China is one that is absolutely unprecedented in human history,” according to Zheng Xiaoping. And, while securitization is an important financing tool for urban development in China, it is also becoming key to China’s fixed-income market.
The result of this poll suggest that respondents are in general quite optimistic that the newly set up super agency will lead to an even faster pace of financial sector reforms and liberalizations in China.
Joe Zhang, chairman of Wansui Micro Credit, says there is no problem with shadow banking in China; microcredit actually provides an invaluable service to small businesses. The key policy issue is how to make solid progress in liberalizing interest rates and ending financial repression.
In the second installment in our series of interviews with experts on China, Fraser Howie explains why he thinks recent actions by the PCOB will fall far short of resolving the country's banking problems.
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