Chinese Shadow Banking: The Case of Trust Funds

This study provides an updated analysis of Chinese trust funds-a specialized and important type of shadow banking. This study is the first to estimate the contribution of Chinese trust funds to economic growth, and also the first to examine the association between trust funds and the volatility of Chinese stock markets. It makes a novel contribution in showing that. Chinese trust loans play a negative role in interest rate pass-through from the policy rate to the lending rates of commercial banks.