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Tracking Collateral Shortages in China’s Money Markets

Conditions in China’s money markets continue to tighten, creating segmented funding conditions and higher funding costs for certain banks and non-bank financial institutions.  The rapid growth of bond lending, in which smaller institutions pay premiums to borrow higher-quality collateral, highlights rising liquidity risks and counterparty credit risks within China’s money markets.

Posted October 2, 2017
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