Baoshang Bank Failure Still Rippling

Caixin: In Depth: How Baoshang Takeover Shook Secretive Corner of Bond Market

Beijing-based New China Fund Management recently said it was forced to default on some products after failing to get loans. The mid-size investment house is among a number of nonbank institutions that have felt a funding crunch as contagion fears spread in the wake of the Baoshang takeover. Ironically, the owner of New China Fund Management was previously controlled by the owner of Baoshang.

Although the central bank called Baoshang an isolated case, distrust among counterparties sparked by the incident have pushed up borrowing costs for smaller banks and nonbank institutions.