China's Asset-Backed Securities Market Booms but Faces Oversight Risks
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China's asset-backed securities market is growing rapidly, reaching $292B in 2022, but remains small relative to banks' balance sheets.
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Mortgage-backed securities account for the largest share of China's ABS market. Interlinkages raise contagion risks if problems emerge.
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Recent fraud case involving inflated asset values highlights oversight weaknesses. Lessons from 2008 crisis relevant.
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Liquidity issues at property developers like Evergrande could spill over. But credit quality higher than 2008.
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Policymakers oscillate between spurring growth via ABS and containing risks. Short-term focus raises systemic vulnerabilities.
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