This paper investigates macroprudential policies and their role in containing systemic risk in China. It shows that China faces systemic risk in both the time (procyclicality) and cross-sectional (contagion) dimensions. The former is reflected as credit and asset price risks, while the latter is...

This paper discusses the banking regulatory and supervisory practices in People's Republic of China (PRC) with reference to the international standard for banking supervision, namely, the Basel Core Principles for Effective Banking Supervision (BCPs). While the PRC has incorporated many sound...

We study the Chinese experience and provide evidence that central banks can play an active role in safeguarding financial stability. The narrative approach is used to disentangle macropudential policy actions from monetary actions. We show that reserve requirements, window guidance, supervisory...

We study how competition for shadow money impacts banking stability. In our model, bankscompete for insured depositors and uninsured shadow money investors and default endogenously.We estimate and calibrate our model to the Chinese banking sector and we find that shadow money investors are...

This study investigates the far-reaching effects of a liquidity regulation policy on the banking sector in China. Since 2014, banks subject to the liquidity coverage ratio (LCR) have neither significantly increased their holdings of qualified high-quality liquid assets, nor significantly reduced...

Shadow financing through off-balance sheet wealth management products (WMPs) has become increasingly important besides deposits in China. We quantify the economic magnitude of the effect of WMPs on banking stability in an equilibrium model calibrated to Chinese banking sector data. Alternative...