Regulatory arbitrage, credit expansion and the development of shadow banking in China- from the perspective of bank-issued wealth management products
Bank-issued Wealth Management Products (WMPs) are perceived as the largest part of China’s shadow banking system and has undergone dramatical growth during the past decade. This study uses a sample of 46 commercial banks and adopts two-step system GMM to investigate the determinants for the rise of...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Human Resource Management Academic Research Society
2024
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| Online Access: | http://psasir.upm.edu.my/id/eprint/117836/ http://psasir.upm.edu.my/id/eprint/117836/1/117836.pdf |
| _version_ | 1848867356164489216 |
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| author | Kang, Kuan Mohd Ashhari, Zariyawati Yahya, Mohamed Hisham Wei Ni, Soh |
| author_facet | Kang, Kuan Mohd Ashhari, Zariyawati Yahya, Mohamed Hisham Wei Ni, Soh |
| author_sort | Kang, Kuan |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | Bank-issued Wealth Management Products (WMPs) are perceived as the largest part of China’s shadow banking system and has undergone dramatical growth during the past decade. This study uses a sample of 46 commercial banks and adopts two-step system GMM to investigate the determinants for the rise of WMPs from 2015 to 2021 in China. The results show that WMPs, as the essential deposit substitution and off-balance-sheet activities of commercial banks, are mainly driven by the motivation to satisfy credit expansion and circumvent regulatory requirements on liquidity and capital adequacy. The results demonstrate that regulatory arbitrage is the primary driving of shadow banking activities. Besides, this study further explores the heterogeneity between nationwide commercial banks (NCBs) and local commercial banks (LCBs) on the motivation to issue WMPs. Comparing with NCBs, LCBs tend to issue more WMPs to raise funds and relieve their supervisory pressure. |
| first_indexed | 2025-11-15T14:35:11Z |
| format | Article |
| id | upm-117836 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T14:35:11Z |
| publishDate | 2024 |
| publisher | Human Resource Management Academic Research Society |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1178362025-06-12T08:11:15Z http://psasir.upm.edu.my/id/eprint/117836/ Regulatory arbitrage, credit expansion and the development of shadow banking in China- from the perspective of bank-issued wealth management products Kang, Kuan Mohd Ashhari, Zariyawati Yahya, Mohamed Hisham Wei Ni, Soh Bank-issued Wealth Management Products (WMPs) are perceived as the largest part of China’s shadow banking system and has undergone dramatical growth during the past decade. This study uses a sample of 46 commercial banks and adopts two-step system GMM to investigate the determinants for the rise of WMPs from 2015 to 2021 in China. The results show that WMPs, as the essential deposit substitution and off-balance-sheet activities of commercial banks, are mainly driven by the motivation to satisfy credit expansion and circumvent regulatory requirements on liquidity and capital adequacy. The results demonstrate that regulatory arbitrage is the primary driving of shadow banking activities. Besides, this study further explores the heterogeneity between nationwide commercial banks (NCBs) and local commercial banks (LCBs) on the motivation to issue WMPs. Comparing with NCBs, LCBs tend to issue more WMPs to raise funds and relieve their supervisory pressure. Human Resource Management Academic Research Society 2024-02-23 Article PeerReviewed text en cc_by_4 http://psasir.upm.edu.my/id/eprint/117836/1/117836.pdf Kang, Kuan and Mohd Ashhari, Zariyawati and Yahya, Mohamed Hisham and Wei Ni, Soh (2024) Regulatory arbitrage, credit expansion and the development of shadow banking in China- from the perspective of bank-issued wealth management products. International Journal of Academic Research in Accounting, Finance and Management Sciences, 14 (1). pp. 382-399. ISSN 2225-8329 https://hrmars.com/index.php/IJARAFMS/article/view/20757/Regulatory-Arbitrage-Credit-Expansion-and-the-Development-of-Shadow-Banking-in-China-from-the-Perspective-of-Bank-issued-Wealth-Management-Products 10.6007/ijarafms/v14-i1/20757 |
| spellingShingle | Kang, Kuan Mohd Ashhari, Zariyawati Yahya, Mohamed Hisham Wei Ni, Soh Regulatory arbitrage, credit expansion and the development of shadow banking in China- from the perspective of bank-issued wealth management products |
| title | Regulatory arbitrage, credit expansion and the development of shadow banking in China- from the perspective of bank-issued wealth management products |
| title_full | Regulatory arbitrage, credit expansion and the development of shadow banking in China- from the perspective of bank-issued wealth management products |
| title_fullStr | Regulatory arbitrage, credit expansion and the development of shadow banking in China- from the perspective of bank-issued wealth management products |
| title_full_unstemmed | Regulatory arbitrage, credit expansion and the development of shadow banking in China- from the perspective of bank-issued wealth management products |
| title_short | Regulatory arbitrage, credit expansion and the development of shadow banking in China- from the perspective of bank-issued wealth management products |
| title_sort | regulatory arbitrage, credit expansion and the development of shadow banking in china- from the perspective of bank-issued wealth management products |
| url | http://psasir.upm.edu.my/id/eprint/117836/ http://psasir.upm.edu.my/id/eprint/117836/ http://psasir.upm.edu.my/id/eprint/117836/ http://psasir.upm.edu.my/id/eprint/117836/1/117836.pdf |