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Wednesday, Dec 19
2012, 4:02 AM
China could be at risk of a severe credit crunch because of Wealth Management Products, which...
China could be at risk of a severe credit crunch because of Wealth Management Products, which are mostly short-term securities that promise high yields and have become massively popular. The underlying assets are often undisclosed but can include speculative real-estate developments. The fear is that a recent default of a WMP could cause a run on the products and hence the credit crunch, or expose banks to massive liabilities.