The only thing we know for certain is that the overregulation of financial markets will stimulate significant additional growth within the shadow banking system. This will further magnify growth for mono line finance companies and other buy side players. As far as China is concerned, as noted by PwC* within shadow banking competition will mount and the classic result will unfold. Risk will be mis-priced, poor decisions will be made, and as a result debt will accrue at an accelerating pace. In China, this will lead to a series of failures and potential government intervention. Could it also result in the same level of regulation we see in the capital markets?
See http://www.pwc.com/cm2020