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[ET Net News Agency, 30 January 2014] Moody's Investors Service said the settlement of a failed trust product mitigates fear about defaults of other trust products, which are a core portion of China's shadow banking sector.迷你倉Last Monday, a media reported that China Credit Trust Co. (CCT, unrated) had reached a last-minute agreement to repay investors of a failed trust product, with a principal amount of RMB3 billion.However, Moody's thinks the reported settlement does not address the underlying fundamental moral hazard issues that encourage excessive risk-taking in China's shadow banking sector. Nor does it address the risk of the shadow banking system being a source of financial system instability.This settlement shows that in some cases banks do not assume the direct repayment obligation in case of product default. However, substantial risks for banks remain. First,there is no detail on where the money to pay off the trust investors has come from. This begs the question of whether the money is wholly迷你倉沙田or partially funded by loans from banks (e.g., ICBC) to relevant parties involved in a potential restructuring of the coal miner, which make such settlements little more than a delaying tactic.Furthermore, this settlement does not remove the risk of future trust-product claims on Chinese banks because it is unlikely to create a precedent for future solutions. Moody's expects the government and regulators to tackle future failures and disputes on an ad hoc,case-by-case basis.Given the substantial scale and growth of shadow banking activities in China, the agencyis doubtful of banks' ability to isolate themselves from related defaults going forward.And although the current proposed settlement does entail losses to investors in terms offoregone interest, by fully repaying their principal, it reinforces the perception that investors will be bailed out one way or another when the products go sour, which is contrary to the establishment of sound market discipline and a healthy credit market, Moody's noted. (KL)迷你倉價錢