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

Lerong Lu, Longjie Lu

Research output: Contribution to journalArticle (Academic Journal)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 languageEnglish
Pages (from-to)146-160
JournalJournal of International Banking Law and Regulation
Volume32
Issue number4
Publication statusPublished - 1 Apr 2017

Keywords

  • China
  • Financial Regulation
  • Securities Markets
  • Chinese Economy
  • Stock Market
  • Financial Law
  • Securities Regulation
  • Margin Finance

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