In China, trust firms shift, rather than reduce, shadow banking risk
Reuters, 16-Mar-2015
Excellent piece on the China trust problem. In our view, when the music stops, the PRC banks which distributed a lot of it will have to take the liability back onto their balance sheets to avoid social unrest, and the Government will then have to bail them out, cut interest rates to zero and engage in massive quantitative easing to prop up nominal asset values, putting downward pressure on the RMB.