Since the beginning of this year, the real estate market in first-tier cities and most second-tier cities have seen high-level transactions shrink. In the first 11 months of this year, the growth rate of real estate development investment and sales area both declined. Low interest rates, quantitative easing, misallocation of credit resources, and slack credit discipline have contributed to the real estate bubble. Accounting standards and regulatory arbitrage allow bank assets to be “out of the table”, and a large amount of funds enter the shadow banking system through banking channels, concealing the true leverage rates and asset quality of financial institutions, especially the compensation mechanism that excessively encourages short-term risk speculation in the financial system, have caused the leverage ratio of the entire system to continue to rise. Regulatory captivity, laziness, and path dependence have weakened the counter-cyclical adjustment of high leverage, leading to the accumulation of a new round of high leverage risk.Historical lessons have repeatedly proved that excessive expansion of bank credit can no longer effectively stimulate the growth of the real economy, but will lead to a sharp rise in risks. Whether we will encounter the " The Gray Rhino" represented by the debt crisis and the real estate crisis is a difficult question to answer at present.
