Unveiling China's Stock Market Bubble: Margin Financing, the Leveraged Bull and Governmental Responses

Lerong Lu; Longjie Lu

Unveiling China's Stock Market Bubble: Margin Financing, the Leveraged Bull and Governmental Responses

Lerong Lu, Longjie Lu

Laws

University of Edinburgh

Research output: Contribution to journal › Article › peer-review

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Abstract

From 2014–15, China witnessed a super bull in its stock market, as the major SSE Composite Index was more than doubled, but it was followed by an unprecedented crash triggering a global sell-off. This article argues that margin trading, which means investors that borrow money from stock brokers or shadow banks to purchase shares, accounted for the stock bubble.

Original language	English
Pages (from-to)	146-160
Number of pages	15
Journal	Journal of International Banking Law and Regulation
Volume	32
Issue number	4
Publication status	Published - 1 Apr 2017

Keywords

China
Financial Regulation
Securities Market
Capital Market
Chinese Economy
Stock Market
Financial Law
Securities Regulation
Margin Finance
Leverage

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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Unveiling China's Stock Market_LU_2017_GREEN AAMAccepted author manuscript, 767 KB

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Cite this

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abstract = "From 2014–15, China witnessed a super bull in its stock market, as the major SSE Composite Index was more than doubled, but it was followed by an unprecedented crash triggering a global sell-off. This article argues that margin trading, which means investors that borrow money from stock brokers or shadow banks to purchase shares, accounted for the stock bubble.",

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AB - From 2014–15, China witnessed a super bull in its stock market, as the major SSE Composite Index was more than doubled, but it was followed by an unprecedented crash triggering a global sell-off. This article argues that margin trading, which means investors that borrow money from stock brokers or shadow banks to purchase shares, accounted for the stock bubble.

KW - China

KW - Financial Regulation

KW - Securities Market

KW - Capital Market

KW - Chinese Economy

KW - Stock Market

KW - Financial Law

KW - Securities Regulation

KW - Margin Finance

KW - Leverage

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Unveiling China's Stock Market Bubble: Margin Financing, the Leveraged Bull and Governmental Responses

Abstract

Keywords

UN SDGs

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