China Looks for a Savior in the Shadows
Brokerages and other non-bank financial institutions play a key role in funneling credit to the real economy. Beijing needs them.
Seeing the light.
Photographer: FRED DUFOUR/AFP/Getty Images
China’s central bank is stretching its arms far and wide to stem convulsions in the real economy. In the process, it’s lending legitimacy to financial firms that have long operated in the shadows.
Beijing has invited non-bank financial institutions to play a larger and more formal role in the aftermath of the first regulatory takeover of a commercial lender in two decades. Interbank rates have ballooned since the seizure of Baoshang Bank in late May, raising funding costs for financial companies. This week, the central bank asked its biggest state-owned banks to support large brokerages such as Citic Securities Co., Huatai Securities Co. and China International Capital Corp.