Chinese banks may face shadow finance credit crisis, say rating agencies

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Chinese banks are facing a potential credit crisis due to their exposure to the country's burgeoning shadow-banking businesses should the sector unravel, according to rating agencies Moody's Investors Service and Fitch Ratings.

Shadow finance represents lending outside the traditional banking industry where underwriting standards are often lower than those deployed by regulated banks. The sector is difficult to measure in terms of its overall size, but Moody's estimates shadow finance in China

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