Is It China’s Lehman Brothers Moment? Unveiling Evergrande Debt Crisis, Financial Risks, and Regulatory Implications

TY - JOUR

T1 - Is It China’s Lehman Brothers Moment? Unveiling Evergrande Debt Crisis, Financial Risks, and Regulatory Implications

AU - Lu, Lerong

AU - Keller, Anat

N1 - Publisher Copyright: © 2022 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.

PY - 2022/6

Y1 - 2022/6

N2 - The ongoing Evergrande debt crisis has been widely dubbed as China’s Lehman Brothers moment as the Chinese corporate conglomerate failed to pay interest on its corporate debt worth £228bn. The case of Evergrande reflects the tightly intertwined links between financial markets and the real economy as well as the fragile balance between financial stability and economic growth that policymakers often find difficult to strike. It also exposes the interconnections between financial stability and investor protection and the multifaceted nature of investors both on-shore and off-shore ranging from global banks and asset managers to vulnerable consumers who have spent their lifesaving in pre-sale purchases. The combination of these unique features provides a fruitful ground for exploring the legal and regulatory challenges, in particular with regard to the protection of domestic and offshore financial investors, monitoring risks to financial stability in China and potential spillover effects.

AB - The ongoing Evergrande debt crisis has been widely dubbed as China’s Lehman Brothers moment as the Chinese corporate conglomerate failed to pay interest on its corporate debt worth £228bn. The case of Evergrande reflects the tightly intertwined links between financial markets and the real economy as well as the fragile balance between financial stability and economic growth that policymakers often find difficult to strike. It also exposes the interconnections between financial stability and investor protection and the multifaceted nature of investors both on-shore and off-shore ranging from global banks and asset managers to vulnerable consumers who have spent their lifesaving in pre-sale purchases. The combination of these unique features provides a fruitful ground for exploring the legal and regulatory challenges, in particular with regard to the protection of domestic and offshore financial investors, monitoring risks to financial stability in China and potential spillover effects.

KW - Too-Big-To-Fail

KW - Evergrande debt crisis

KW - China’s Real Estate Market

KW - Keepwell agreement

KW - Onshore and Offshore investors

KW - Systemic risk

KW - Investors protection

KW - Macroprudential policy

UR - http://www.scopus.com/inward/record.url?scp=85171661986&partnerID=8YFLogxK

U2 - 10.1080/17521440.2022.2150524

DO - 10.1080/17521440.2022.2150524

M3 - Article

VL - 16

SP - 133

EP - 144

JO - Law and Financial Markets Review

JF - Law and Financial Markets Review

IS - 1-2

ER -