On January 23, swissnex China, in collaboration with the HEC Lausanne, organized an event focused on “Shadow Banking in China”. It was also the launch of our new “Café des Sciences” event series, which is scheduled to take place every third Thursday each month at swissnex China or our partner spaces and offering a monthly platform for spotlight scientists and startups.
First, we had a brief opening speech by Dr. Felix Moesner, Science Consul and CEO of swissnex China, which was followed by a short introduction to the presentation’s topic by Victor Dietrich, HEC Lausanne Ambassador and Junior Project Manager at swissnex China.
Victor Dietrich consequently gave the floor to the speaker Prof. Ying Liu, Assistant Professor at the Shanghai University of Finance and Economics and an esteemed graduate of HEC Lausanne – The Faculty of Business and Economics of the University of Lausanne, where she obtained her PhD.
She gave an insightful presentation on the Shadow Banking System in China and provided an overview of activities related to credit intermediation, liquidity and maturity transformation that takes place outside the regular banking system. She also presented the reasons for the fast growth and associated risks.
She illustrated the differences it has with traditional banking, the advantages and the drawbacks of this practice, as well as the differences in this practice between China and the world. 16% of the whole world’s shadow banking come from China even though it is a decreasing slightly as the government wants to regulate and control a bit more this domain. We had then a deeper look at entrusted loans, a major part of shadow banking in China. Entrusted loans are the inter-corporate lending facilitated by financial companies as trustee. Finally, we explored into products such as Asset Management Products in depth and more specifically Wealth Management products.
This talk generated a great interest both abroad, where a lot of people were keen to have more information on the topic and in Shanghai were participants posed many questions during the presentation, generating some very dynamic dialogue.
Finally, we pursued the discussions and made meaningful connections around drinks and finger food served in a very professional manner by Geneva Catering. The participants expressed positive feedbacks and are excited to attend the next event at swissnex China.
We thank all the attendees for joining the first “Café des Sciences”, the HEC Lausanne for co-organizing this event, Geneva Catering for providing the excellent food and of course Prof. Ying Liu for sharing her research in this presentation who made this event an excellent Alumni gathering for the University of Lausanne – UNIL. We are looking forward to collaborating with all these partners again in the future.
HEC LAUSANNE ALUMNI EVENT
Shadow Banking in China:
Understanding the Chinese Banking Environment
The term shadow banking may conjure up images of shady back-room transactions in most people. However, it is not necessarily a detrimental system; In fact, it has been part of the financial system in many countries. The term was coined to describe all activities related to credit intermediation, liquidity and maturity transformation that takes place outside the regular banking system. Before 2015, entrusted loans constituted the largest component of China’s shadow banking system. Nowadays China’s shadow banking is made up mostly of Wealth Management Products. What are these unregulated financial activities and why did this shift occur? We will discover the reasons for the fast growth of the market and the associated risks in this lecture.
Prof. Ying Liu is an assistant professor at the Shanghai University of Finance and Economics and an alumna of HEC Lausanne. Her research focuses on entrusted loans, which is corporate loans between two firms and a major part of China’s shadow banking system. She showed us what is shadow banking, and the legal activities or products of China’s Shadow Banking sector.
Prof. Ying LIU
Assistant Professor, Shanghai University of Finance and Economics
Alumna HEC Lausanne
Research fields: Entrusted Loans
Café des Sciences
Shanghai | Every third Thursday each month 2019
Café des Sciences is a new format at swissnex China offering a monthly platform for Swiss Spotlight Scientists and Start-ups to present their projects and connect with the local community. The lectures will offer a casual setting in which speakers can present their work and engage with the attendees during a Q&A period. Audience are welcome to enjoy the networking reception with Swiss flavour after the talk. The lecture is scheduled to take place every third Thursday each month at swissnex China or our partner spaces.