Growing Risks for China's Small Banks

The video discusses the challenges faced by Chinese banks, particularly mid-tier and smaller banks, due to aggressive credit growth and shadow banking practices. David Marshall, an expert in the field, highlights the risks of liquidity issues and the government's role in maintaining economic stability. The discussion also touches on the moral hazard problem and the need for the government to balance discipline with confidence to avoid a financial crisis.

In what ways might the Chinese authorities balance discipline and confidence in the banking sector?

What is the potential impact of the government's crackdown on shadow banking?