Lehman lessons should keep China out of trouble

On the 5th anniversary of the Lehman Brothers bankruptcy, Chinese economists tell FinanceAsia that, despite fears of a burgeoning shadow banking industry, the country will avoid systemic financial failure.
Sign of the times: Chinese economists say they are convinced a bank default on such a scale will not happen in the country, in spite of fears of a swelling shadow banking industry.
Sign of the times: Chinese economists say they are convinced a bank default on such a scale will not happen in the country, in spite of fears of a swelling shadow banking industry.

It sometimes feels like the whole world is bracing for the financial crisis to re-emerge in China, like a fresh outbreak of Sars.

But, as the 5th anniversary of Lehman Brothers’ came and went at the weekend, Chinese economists say they are convinced a bank default on such a scale will not happen, in spite of fears of a swelling shadow banking industry.

Broadly, the collapse of the US bank, and much of the chaos that followed, was caused by massive lending of banks backed by property mortgages, which were later leveraged, transferring risks to other parts of the financial system.

Meanwhile, regulators,...

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