Too big to fail? China’s wealth management products stir debate

The default of a Chinese investment plan has handed Beijing a tough choice: bail out investors and endorse moral hazard or let it fail and risk unnerving those who hold at least US$1 trillion in so-called wealth management products.

China’s bank regulators are debating what to do about the investment sold at a Hua Xia Bank branch near Shanghai, which failed to pay out on maturity late last month. The bank, a mid-sized lender partly owned by Deutsche Bank , says a Jiading district branch employee sold the product without authorisation.

via Business feed http://www.scmp.com/business/banking-finance/article/1108881/too-big-fail-chinas-wealth-management-products-stir-debate