Study On China's Shadow Banking System Risk Management

When the social credit demand exceeds the credit supply capacity of commercial banks, the shadow banking out of regulation emerged. The interest rate liberalization reform brings commercial banks a series of problems, which include the growing debt pressure, the high loan-to-deposit ratio and the more stringent capital regulation. Hence, the development of commercial banks is constrained by these factors. Meanwhile, a lot of non-bank financial institution's capital has the inner impulse to seek the intrinsic value.Under the two factors mentioned above, the scale of shadow banking in our country continues to expand. There is no doubt that the shadow banking has a positive effect on economic development in china, but the risk implied by it can not be ignored. From the perspective of the world financial market development, we are on the process that the financing structure adjustment makes the resource rebalance and this path is the process that European and American countries have ever gone through. If this degree we master is appropriate, economic growth will be more quality and if this degree is inappropriate, the economy may be disturbed by the financial risk. Thus, the management of shadow banking risk is a new subject, we can learn from foreign experience, meanwhile our country have its unique feature and this deserves to be studied, then we can find the new focus and direction on shadow banking.At present, the domestic scholars have achieved certain achievements on the study of shadow banking. On this basis, we further classify the shadow banks into shadow banks in commercial banks, shadow banks in non-bank financial institutions and non-formal shadow banks. Because the regulation of the non-formal financial institutions in our country has just started, we can not collect information; hence we will focus on the risk identification and control of first two categories, and then propose the policy advice for shadow banking risk management. This paper's work is as follows:Firstly, in order to find the accurate target on the risk management of China's shadow banking and provide practical examples and theoretical basis for analysis.We analyze the difference of shadow baking's origins, definitions, risk and regulatory between China and America and then summarize the basic characteristics of China's shadow banking.Secondly, we study the risks in the shadow banking of commercial banks.In this part, we focus on the risk signal's identify,the measurement of the level of risk and the control of risk hazards, and through quantitative analysis, we may find where the greatest risk occurs.Thirdly, we mainly analyze the risks in shadow banking of non-bank financial institutions. In the first place, we study the business and risk category in the shadow banking of non-bank financial institutions, the next, we calculate the risk of trust business based on the data collected, and in the end we investigate the extent of harm when the shadow banking risks outbreak and the focus of prevention and control.Fourthly, by the above analysis and calculation, we offer some recommendations to improve the regulatory system. In order to resolve the shadow banking risks within the financial system, we should focus three aspects:the government financial reform, the industry's inherent impulse of funds and the construction of enterprise compliance system.In general, this paper tries to analyze the characteristics and problems of China's shadow banking rather than completely copying the risk control theory and experience of foreign countries. We should take gradual macroeconomic adjustment policies to resolve the urge that various financial intuitions use the shadow banking to make a profit. During this process, the most important are two points:The first point is that our country should impalement the interest rate liberation, Admittedly, China has begun a pilot to promote interest rate liberation and removal the limits of original fixed deposit and lending rates, but compared with our innovative financial products and systems, there is still a gap. Therefore, only the level of interest rates in financial markets can represent the demand for capital, we can really reduce the risk of shadow banking system. The second point is the asset securitization implementation must resolve the conflicts between financial innovation and risk control system. The future for the shadow banking must be the asset securitization business that it is increasingly recognized. But regardless of the form of financial innovation, risk must be controlled, and we can not completely copy foreign experience, or from want self-made. We should be able to shrink freely on the risks, only by this can we minimum the financial risks.Moreover, we should try to cut off the pipeline between the real economy, so that the real financial innovation can promote the economic development.