Entrusted loan is a special term in Chinese financial market, which refers to aloan provided by a corporate lender to a corporate borrower through a commercial bank who acts as a trustee of the lender. Entrusted loans, together with trust products, P2P lending and other off-balance sheet business are considered as shadow banking in China. Since the global financial crisis, China’s shadow banking grew dramatically to provide loans to borrowers who cannot get credit from banks. According to People’s Bank of China (PBOC), the entrusted loans reached 13.97 trillion yuan by end of 2017, accounting for 8% of the aggregate financing in China. Though shadow banking has played a positive role for economic growth, there is growing concern on its risks, which is multi-faceted, hidden, complex, and contagious.