In April 2017, Dr Lerong Lu and Ms Longjie Lu (PhD Candidate, School of Law, University of Leeds) published an article in the Journal of International Banking Law & Regulation. 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.
Citation: Lerong Lu and Longjie Lu, ‘Unveiling China’s Stock Market Bubble: Margin Financing, the Leveraged Bull and Governmental Responses’, Journal of International Banking Law & Regulation (2017), Vol.32(4), pp.146-160.
Publisher: Sweet and Maxwell
Key Words: Securities Law, China, Stock Markets, Securities Regulation, Margin Finance
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