The Impact of the Deleverage Policy and Shadow Banking Regulation on Financial Market Performance: Empirical Evidence from China

Chencheng Song; Yiran Wu; Zhiyan Liu

doi:10.18686/fm.v7i4.5407

The Impact of the Deleverage Policy and Shadow Banking Regulation on Financial Market Performance: Empirical Evidence from China

Chencheng Song, Yiran Wu, Zhiyan Liu

Abstract

Deleveraging policies have been a controversial topic in the corporate finance sector; this paper used samples of public listed firms in Hong Kong and Mainland China to study the Chinese 2018 deleverage policy and shadow bank regulations’ impact on the financial market. With the implemented research method, the paper finds the regulation had negatively impacted the equity market performance and may have created additional burdens for the firms. Our finding suggests regulators should be cautious in terms of making policies, and with economic policies’ uncertainties, there might be unwanted consequences.

Keywords

Deleveraging; Shadow Bank; Financial Market; Stock Performance; Financial Regulation; Government Intervention

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References

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DOI: http://dx.doi.org/10.18686/fm.v7i4.5407

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