Interessante artigo sobre o comportamento/praticas do setor bancário chines.
These days Chinese regulators spend much of their time chasing shadows. The shadows in question belong to the banking industry, the more dimly lit reaches of which have grown voluminously, some might say alarmingly. So steep has been the trajectory that almost half of all new credit is now supplied by non-banks or through off-balance-sheet vehicles of regular banks, up from just 10 per cent a decade ago.
Optimists see shadow banking as a largely positive development, the stirrings of a more sophisticated financial system in which interest rates break free of state control and risk is more closely matched with reward. For pessimists, shadow banking is an accident waiting to happen – Middle Kingdom subprime.
Certainly, the optimists are too blasé. There is every reason to believe that much of the credit sluicing through these informal channels goes to less-than-worthy investments. Rather, shadow banking is the deformed stepchild of contradictory state policies. On the one hand, Beijing wants a financially sound banking system with tightly controlled deposit and lending rates. On the other, it seeks high economic growth, which must be fed by a stream of few-questions-asked credit. The upshot is an ill-defined and under-regulated part of the financial system that now controls assets worth about Rmb20tn ($3.2tn), or 40 per cent of gross domestic product, a fourfold increase from 2008.
Shadow banking can – and usually does – take many forms, including loan sharks, investment companies known as trusts and off-balance-sheet lending by regular banks. The most important of the latter are “wealth management products”, considered so potentially dangerous by some analysts that they are known affectionately as “weapons of mass Ponzi”. Barclays estimates that such investments have grown ninefold to Rmb7.6tn since 2009 and now make up 8 per cent of total bank deposits.
In return for locking up one’s money for three or six months, such products offer annual rates of 4-5 per cent, better than the 3.25 per cent on normal deposits. Since they are “guaranteed”, few depositors take much interest in the underlying asset. Typically, the money goes to other banks (which lend it on) and to property companies, small and medium-sized businesses and local governments.
Such products are potentially dangerous for several reasons. First, there is a mismatch between their short-term maturity and the longer-term projects they fund. To the depositor, the vehicle looks like quasi-cash; to the bank, it could be funding an illiquid multiyear investment. Second, the underlying asset may not be creditworthy. Reuters investigated one wealth management product called “Golden Elephant No 38” – whatever happened to numbers one to 37? – which offered a more than tempting annual return of 7.2 per cent. The asset being funded turned out to be a deserted housing estate in the middle of a rice paddy field in Jiangxi province. Third, banks often pool assets from different schemes, paying the interest and principal of maturing schemes from new deposits. It would be hard to find a better definition of a Ponzi scheme.
Paradoxically, the biggest concern may not be default, but the fact that such investments appear to be risk-free. In one recent case, investors who bought a product through Huaxia Bank were compensated in full when the investment failed. “Because they get bailed out nobody needs to worry,” says May Yan of Barclays. “It’s moral hazard rather than a healthy development of the market.” The absence of default risk plus the lure of higher returns is a recipe for capital misallocation. It belies any idea, says Patrick Chovanec, a China-based economist, that shadow banking represents a more market-driven pricing of risk.
Thankfully, regulators are aware of the risks. They are experimenting with regulations to force greater disclosure of off-balance-sheet lending and are weighing whether to enforce limits. Such attempts are welcome but unlikely to prove sufficient. Capital, like water, is wont to find the path of least resistance. Banks and non-banks alike have proved adept at circumventing regulations. According to Tao Wang at UBS, assets controlled by trusts grew 47 per cent in the year to June 2012, precisely when regulators were supposed to have been clamping down. Banks and shadow banks turn out to be two sides of the same coin. Banks have taken to distributing trust-company loans in bite-sized packages and even to offloading non-performing loans to trusts, which package them into investment products for sale to retail investors. Does any of this sound familiar?
Paradoxically, one way of minimising shadow banking risk would be further deregulation of the formal sector. Because the state sets deposit and lending rates artificially low – albeit with some leeway – both depositors and financial institutions are incentivised to explore the wilder fringes of the financial system. Depositors want a better rate and banks a wider spread. If banks had greater say over who they lent to and at what interest rate, they would begin to align risk with reward.
If the government were to pursue this logic, it would need to relinquish its close control over where capital goes and at what price. That goes against the grain of a one-party state. The irony, though, is that the more Beijing tries to maintain its grip over credit, the more likely it is to push lending into the shadows.
Fonte: FT
