Chinese banks' shadow loans surge in first half

BEIJING: Shadow lending by listed Chinese banks surged in the first half, underlining the challenges faced by the country’s banking regulator as it tries to rein in the use of opaque lending structures that are seen as a threat to financial stability.

China’s lenders, led by the mid-tier banks, have been increasing their use of shadow lending products for years, as they can offer higher returns and tie up less of a bank’s capital than traditional lending.