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A New EraChina’s Leverage Ratio and Systemic Financial Risk Prevention

A New Era: China’s Leverage Ratio and Systemic Financial Risk Prevention [The leverage ratio of non-financial businesses and the government sector in China has been on the rise since the outbreak of the global financial crisis. China’s leverage ratios are not high compared with those in developed countries but substantial implicit liabilities and fast growth of debt indicate considerable potential risks. The rapidly rising leverage ratio is closely connected with such factors as overreliance on indirect financing, low efficiency in the use of funds, large amounts of funds occupied ineffectively because of overcapacity and overuse of monetary and credit policies as instruments. Now the top priority for financial regulators is to resolve the debt issue and prevent systemic financial risks.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

A New EraChina’s Leverage Ratio and Systemic Financial Risk Prevention

Editors: He, Dexu; Wang, Chaoyang
A New Era — Aug 31, 2018

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References (2)

Publisher
Springer Singapore
Copyright
© The Editor(s) (if applicable) and The Author(s) 2019. Based on a translation from the Chinese language edition: 新时代: 中国经济全球化 Copyright © Social Sciences Academic Press, 2018 All Rights Reserved
ISBN
978-981-10-8356-3
Pages
83 –111
DOI
10.1007/978-981-10-8357-0_4
Publisher site
See Chapter on Publisher Site

Abstract

[The leverage ratio of non-financial businesses and the government sector in China has been on the rise since the outbreak of the global financial crisis. China’s leverage ratios are not high compared with those in developed countries but substantial implicit liabilities and fast growth of debt indicate considerable potential risks. The rapidly rising leverage ratio is closely connected with such factors as overreliance on indirect financing, low efficiency in the use of funds, large amounts of funds occupied ineffectively because of overcapacity and overuse of monetary and credit policies as instruments. Now the top priority for financial regulators is to resolve the debt issue and prevent systemic financial risks.]

Published: Aug 31, 2018

Keywords: Leverage ratio; Implicit liability; Non-financial business; Systemic financial risk

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