Getting a grip on shadow banking (3)

As China's financial market is still in a nascent stage, more needs to be done to boost its competitiveness. The advantages of regular banking and shadow banking can both be developed with good regulation. China's regulators are fully aware of the potential risks and the shadow banking system will be regulated to a greater extent, such as putting all banks' lending on the balance sheet and increasing the risk control policies in trust companies.

However, in tightening their control over the shadow banking system both the government and the financial institutions need to ensure that they protect the interests of common investors, especially by informing them of the underlying risks of high-return products that can be bought in commercial banks.