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Michelle Coha


Member since July 26, 2013

  • The Corliss Group on US meltdown over China

    Communication, Communication Design

    But observers believe Beijing could use its massive foreign reserves to save financial system if shadow banking activity spirals out of control..

    Parallels between the United States and China have started to look more ominous after several years of rampant credit growth and the emergence of an increasingly uncontrollable and unsustainable shadow banking system.

    China's massive foreign reserves could, however, be the last tool in the bag for its bank-centric financial system if no timely regulations are implemented.

    With the memory of the collapse of Lehman Brothers in 2008 still fresh, investors are fretting over the growth of thinly regulated shadow banking activity. Trusts, entrusted loans and bank acceptance bills shot up sharply to a record 294 billion yuan (HK$370 billion) last month.

    According to Moody's Analytics, China's core shadow banking products, which are often opaque and subject to little or no regulation, almost doubled to 20.5 trillion yuan last year from 11.7 trillion yuan in 2010. The US firm excludes entrusted loans and trust loans as they own underlying assets.

    Late last year, a wealth management product (WMP) sold by a Shanghai branch of Huaxia Bank caused a stir when dozens of investors were informed that Zhongding Wealth Investment Centre, the borrower, would default on repayment.

    The scandal prompted the banking regulator to increase its scruti...

  • Source:

    Upbeat growth and unemployment reports from Spain led the country's stocks to rally on Tuesday, but some economists warned that hopes of an imminent recovery remained unrealistic.

    Spain's benchmark stock index, the IBEX 35, traded nearly 2 percent higher after the Bank of Spain released a report that estimated the economy shrank by only 0.1 percent in the second quarter — its smallest decline since it slid back into recession at the end of 2011.

    The Bank of Spain's quarterly bulletin is viewed as an accurate indicator of official gross domestic product (GDP) data, which are due on July 30. If the official numbers are in line with this estimate, it will suggest a deceleration in the pace of contraction. Spain's economy shrunk by 0.8 percent in the last quarter of 2012, and by 0.5 percent in the first quarter of 2013.o

    "If proven correct, this would be a stronger-than-expected GDP figure, more clearly signaling that the worst of the crisis is behind the country… and, in our view, would be consistent with positive growth for the second half of 2013," Antonio Garcia Pascual, chief euro area economist at Barclays Investment Bank, said on Tuesday.

    Meanwhile, Spain's ABC newspaper reported that official data out on Thursday will show the biggest quarterly fall in unemployment since before the economic crisis. Spain's rate of unemployment was 27....