Abstract

This paper aims to discuss the effectiveness of financial deleveraging by observing and studying the changes in the scale of shadow banking in China. China’s shadow banking can be divived into two parts: intra-bank shadow banking and extra-bank shadow banking, whose scale can be calculated by the indirect method based on the balance sheet and the direct method respectively. Through data statistics and calculations, it is concluded that the scale of shadow banking in China has slowed down since 2017 and started to decline gradually in 2018. In other words, financial deleveraging is effective.

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