Tuesday, August 14, 2018

How the central bank dresses up its figures - Victor Shih

Victor Shih
China's central bank PBOC is dressing up its figures. Financial analyst Victor Shih, author of Factions and Finance in China: Elite Conflict and Inflation, has for Bloomberg a look at the methods the bank is using.

Bloomberg:
Including asset-backed securities in its measure is a way for the central bank to "dress up" the aggregate financing number to show financial resources are still on the rise, said Victor Shih, a professor at the University of California in San Diego who studies China’s politics and finance. 
The sudden growth of asset-backed securities may suggest that the authorities are allowing funds and trust companies to use interbank leveraging to finance purchases of asset-backed securities, which will once again jump-start off-balance-sheet credit growth, he said. "Since 2011, marginal financing has come mainly from off-balance-sheet shadow financing," he said. "Regulations in the past year have made the growth of shadow finance problematic. Thus, the increase in on-balance sheet lending was not enough to make up for the shrinkage of shadow financing."
More at Bloomberg.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on the ongoing trade war between China and the US? Do check out this list.

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