Research On The Macroeconomic Effect Of China's Shadow Banks

The global financial crisis in 2008 brought unprecedented impact on the real economy and financial markets.This huge negative impact has also spread to most countries and regions in the world.When governments,international organizations,and domestic and foreign scholars traced their roots to this crisis,shadow banking,a grey area Ooutsicde of supervision,quickly attracted worldwide attention and became a key research area for academic circles at home and abroad.Due to factors such as the institutional environment and the development stage of the financial market,China's financial crisis has not been severely impacted.However,the ever-expanding financial scale,the increasingly perfect financial market system,the continuous diversification and the integrated financial operation and development have made big changes in the social financing structuc.The social financing structure has undergone major changes.In the scale of social financing,the proportion of RMB loans continues to cdecline,and the role of financing channels outside the banking system has become increasingly evident.Based on the possible impacts of shacdow banking on macrocconomic uncertainty and the lessons learned from the US subprime mortgage crisis,we need to incorporate the macroeconoumic effects and regulations of China's shadow banking into a framework for collation and understatanding.The article mainly analyzes the macroeconomic effecls of Chilna's shadow banking.The research content can be roughly divicded into three levels.The firsi lcevel is the impact of shadow banking on major macroeconomic variables,that is.in the shadow banking economic system,whether various types of shocks affect the variables such as real estate prices,consumption.investment,economic growth,etc.,and how the degree of influence is nmeasured.Whether monetary policy should pay attcention to rcal estate price fluctuations and how the lcevel of attcention should be set.The second level is how to analyze the transmissicon mechanism ot ystemic risk when the existence of shadow banking can have a signicant impact on consumption,investment and output.When the economy faces shocks,how docs the risk changce?The macro-prudential policy that focuses on leverage and real estate prices have implications for the size of shadow banking and what foms of monetary policy rules that are consistent with China's national conditions.The third level is what kind of regulatory measures China should adopt to curb systemic risks,maintain macroeconomic stability,and whether more stringent rcgulatory measures shotuld be acdopted for the regulation of shadow bainking,and whether there are more reasonable measures.The article constructs a dynamic stoclhastic general equilibriun,m modelc that includes house prices and shadow banking,and simulates the impact of various types of shocks on the macro-economy of the real estate market,shadow banking and coutput.As the alternativc evolution between commercial banks and shadow banks has increased the difficulty of implementing China's macro-prudential monetary policy rules,the scocial flinancial leverage rate has continlued to rise.The article continLues to construct a dynamic stochastic general equilibrium model that includes shadow banking and financial leverage.It concludes that China's:nacro-prudential monetary policy rules have remarkable results in cointrolling financial leverage.Both relaxed price rules and tightened quantitative rules can cleffectively suppress shadow bank redit scale.Social welfare analysis shows that when monetary policy is pegged to finaincial leverage,it can increase the intensity of China's macro-prudential monetary policy regulation and control,but it will increase the fluctuation range of nacroeconomic vcariables,and social wel fare losses will increase.Finally,the article selects macroeconomic variables that can be observed,and macroeconomic variables that arc more relevant to shadow banking,including money supply.nterest rates,output,and inflation,etc.,to build a vector autoregressive nmocdel.Impulse response imctions and variance decoimposition are Lused to analyze the iirmpact of vairicous types of actual zhocks on econo,mic variables such as the size of shadow banks and the sizc of commercial banks.The possible innovations of the article are firstly embodied in the content,based on the grasp of the definition of China's shadow banking,analyzing the root causes of the collapse of China's assets,and putting forward effective suggestions for the implementation of monetary policies and macro-prudential policies.Secondly,in terms of analysis perspectives,the discussion of shadow banking risks also confirmed the contribution of shadow banking to China's economic development.Finally,combining with the actual situation of China's financial market,the foreign dynamic stochastic general equilibrium models are modi'fied to study the impact of shadow banking on macroeconomics,and simulate the impact of various demand shocks and supply shocks on the economic system.By clarifying the macroeconomic effects of shadow banking,the article knows that shadow banking will not necessarily lead to a systemic financial crisis,and that shadow banking has both positive and negative effects on macroeconomics and is "double-edged sword".In supervising the shadow banking,we must seek advantages and avoid disadvantages.We must neither leave nor deny it.Therefore,China can construct a macro-prudential supervision framework for shadow banking in China,establish a risk early warning mechanism and information disclosure system,strengthen the overall supervision of shadow banking,and guide the healthy development of the shadow banking system.