Shadow Bank Crisis in India Makes It Hard to Cut Bond Losses
- Trading in shadow financier bonds dropped to a five-month low
- Mutual funds are at risk with big holdings of shadow bank debt
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As India’s shadow banking crisis deepens, it’s getting harder for investors to cut their losses in the sector’s debt.
Mutual funds are in a particularly tough spot, given their large holdings of non-bank financing company bonds. That, in turn, threatens everyone from individual investors to conglomerates with money in the funds, underscoring broader risks to policy makers already grappling with an economic slowdown.