Geo Securities Says China Wants Banks to Deleverage

The video discusses the need for Chinese banks to deleverage due to the risks posed by shadow banking and over-leveraging. It highlights the competition among banks to attract deposits through wealth management products, which contributed to the 2015 stock market bubble. The discussion also covers the impact of financial activities on Hong Kong's market and the lessons learned from the 2008 financial crisis, emphasizing the importance of controlling credit growth to prevent economic instability.

What is a key reason for banks to engage in shadow banking activities?

• To attract more deposits and business

• To avoid competition with other banks

• To comply with government regulations

• To reduce their balance sheet size

How did wealth management products contribute to the 2015 stock market bubble?

• By stabilizing the currency

• By increasing foreign investments

• By channeling funds into the stock market

• By reducing interest rates

What is one effect of the money flow into Hong Kong via the stock connect?

• Reduced foreign investments

• Increased interest rates

• Improved performance of the Hang Seng index

• Decreased stock market volatility

What lesson did China learn from the 2008 financial crisis?

• The benefits of shadow banking

• The necessity of increasing GDP

• The need to control over-leveraging

• The importance of rapid credit growth

What is the current credit level in China compared to its GDP?

• 2.5 times the GDP

• Equal to the GDP

• 1.5 times the GDP

• 3 times the GDP