Suppose new ways of holding wealth start to appear in China (as in the case of Taobao and other Internet bankers offering high-yielding money market funds).
a. Explain the impact on bank deposits (sight deposits, for example) as Chinese citizens learn of these opportunities.
b. Is the arrival of this alternative a good or bad thing? What might be the impact on the prices in equity or real estate markets?
c. Why might China's Banking Regulatory Commission (CBRC) cast a wary (regulatory) eye toward such new asset classes?

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The Answer of Suppose new ways of holding wealth start to appear in China (as in the case of Taobao and other Internet bankers offering high-yielding money market funds).
a. Explain the impact on bank deposits (sight deposits, for example) as Chinese citizens learn of these opportunities.
b. Is the arrival of this alternative a good or bad thing? What might be the impact on the prices in equity or real estate markets?
c. Why might China's Banking Regulatory Commission (CBRC) cast a wary (regulatory) eye toward such new asset classes?

Suppose New Ways of Holding Wealth Start to Appear in China