Shadow banking in China and suggestions for Vietnam

Abstract

Shadow banking (SB) is a form of credit intermediation that is growing fast globally, in which China is an identical
market of this process. Despite shadow banking provides a beneficial service used to raise finance, its structure
and activities lack transparency and it (Poschmann, 2014) is prone to a variety of risks. This document reviews
fundamental tools, mechanism as well as potential risks and monitoring framwork of Chinese shadow banking
system. In addition, this paper examines shadow banking institutions in Vietnam and gives several recommendations
for establishing standards to mitigate disadvantages while preserving its’ advantages in Vietnam.