In this paper, we examine China's shadow banking institutions for financial risks. We use a bank stress test to analyze solvency risk for the systemically important financial institutions and the banking system as a whole. We find that there is some risk of bankruptcy and potentially a risk of liquidity shortages, for which we lack sufficient data to run a stress test. We conclude with policy recommendaitons. (C) 2014 Elsevier Inc. All rights reserved.
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