Not exact matches
China's debt problems, in other words, can not be resolved administratively, by fixing the shadow banking
system, by imposing discipline on borrowers, or indeed by eliminating
financial repression (much of which, by the way, has already been squeezed out of the
system by lower nominal GDP growth).
Leland describes the Chinese reform as a reversal of
financial repression and this
repression in the context of the Chinese economy is the oppression of consumers and households by state organizations through its economic
systems.
Companies go broke when they have no liquidity, so what
financial repression has done is push liquidity into the
system.
We already knew that the Chinese
financial system was completely distorted from years of regulatory
repression and crony capitalism, as a whole new report on finance in China by The Economist demonstrates (see the editorial here, and the report starting here).
So when you go to
financial repression rather than us pulling our money out of the
system and hoarding it, they would force us to use an electronic currency which they can control.
Financial repression is categorized as «macroprudential regulation» — i.e., government efforts to «ensure the health of an entire financia
Financial repression is categorized as «macroprudential regulation» — i.e., government efforts to «ensure the health of an entire
financialfinancial system.