Research On The Shadow Banking Business And Its Risk Of Commercial Banks

After the 2007 sub-prime mortgage crisis in the United States,shadow banking has become a hot topic among the regulators,academics and the financial industry.Financial liberalisation and the development of Financial Sunac in the 1970 s and 1980 s led to a dramatic expansion in the size of shadow banking,which played an important role in the financial system.The development of shadow banking promotes the raising of financing efficiency by increasing the level of financial system,but it also brings the rapid accumulation of risk and affects the stability of financial system.With the rapid growth of off-balance-sheet activities of banks and the continuous expansion of non-bank financial institutions,China’s financial industry has entered a stage of rapid development in scale and deep restructuring,shadow banking has become an important part of China’s financial system.However,China’s shadow banking has its own uniqueness,the most prominent feature is to "commercial banks as the core".Based on this background,this thesis analyzes the shadow banking business and its risk from the perspective of commercial banks,which is of great practical and theoretical significance.At first,this thesis sorts out the relevant literature of shadow banking,defines the relevant concepts such as shadow banking,expounds the relevant theoretical basis,and analyzes the development course of shadow banking in China,on this basis summed up the characteristics of China’s shadow banking business,and its development model,scale measurement analysis.Then,based on the analysis of 36 listed banks in China and their annual panel data from 2010 to 2019,this thesis makes an empirical study on the risks and governance of shadow banking,this thesis puts forward some corresponding policy suggestions for the development of shadow banking business and its risk management.The research in this paper provides a theoretical basis for improving the supervision system and supervision system of shadow banking,and quantifies the influence of shadow banking on default risk and systemic financial risk,the effective combination of financial technology and the risk management of shadow banking further enriches the theory of shadow banking.The main contents and research conclusions of this thesis are as follows.First,the shadow banking business in this thesis refers to the shadow banking business of commercial banks.The Financial Stability Board(FSB)has specified that shadow banking is the product of both financial Sunac and regulatory evasion,and is not subject to the traditional banking regulatory framework,it also has the functions of credit conversion,term conversion and liquidity conversion that the traditional banks have.The differences of financial structure,financial market development and financial supervision environment lead to the differences of shadow banking business.As far as China is concerned,the biggest characteristic of its shadow banking business is to take the commercial bank as the core,therefore,this article chooses from the commercial bank this microscopic angle of view to define the shadow banking business.The shadow banking business of commercial banks is based on the channel of other financial institutions,where commercial banks disguise their credit assets as other assets in the table or transfer them off the table,"class loan" business to a business with financing constraints.In essence,the shadow banking business of commercial banks is a capital operation based on regulatory arbitrage,which is a "quasi-credit" business.The change of supervision policy brings about the change of shadow banking business form of commercial banks.Under the present supervision policy,the shadow banking business mainly manifests as the purchase and resale financial assets business and the receivables investment business.Therefore,this thesis calculates the scale of these two types of business in the total assets of the bank,in order to measure the size of commercial banks shadow banking business.Second,the shadow banking business of commercial banks has a significant impact on the risk of bank default.The empirical research shows that:(1)Commercial banks expand the individual bank default risk significantly while carrying out shadow banking business;(2)Compared with small and medium-sized banks,compared with the loose monetary policy,under the background of the tight monetary policy,the expansion effect of the shadow banking business of large commercial banks on the default risk of banks is more significant.The shadow banking business of commercial banks has a more significant effect on the expansion of bank default risk.The further research finds that the strengthening effect of shadow banking on bank default risk is mainly realized by the mechanism of leverage ratio and net interest margin.Third,the shadow banking business of commercial banks has a significant impact on systemic financial risk.In this thesis,we use Co Va R to measure the systemic financial risk of36 listed banks in China.As for the influence of shadow banking on systemic financial risk,this thesis studies it from two aspects: theoretical model derivation and empirical econometric model regression,the results show that the shadow banking business of commercial banks will bring systemic financial risk,and with the expansion of the shadow banking business,the systemic financial risk will also increase.Through regression test,the empirical model further finds that the risk diffusion effect of shadow banking in the financial system is particularly significant in the large commercial banks.Fourth,the development of financial technology can effectively restrain the scale of shadow banking business of commercial banks,which can effectively reduce the default risk and systemic financial risk of shadow banking business.The application of advanced digital technology by commercial banks can help to obtain more information about borrowers,effectively control the occurrence of financial risks,and promote the emergence of new financial service models,to the traditional financial market,business model and financial institutions,such as bring significant impact.The results show that:(1)The development of financial technology can effectively restrain the shadow banking business scale of commercial banks,and then reduce the default risk and systemic financial risk;(2)Compared with small and medium-sized banks,the development of fintech has been more effective in curbing the size of shadow banking business of large commercial banks,thereby reducing the risk of bank default and systemic financial risk.Further research found that the financial technology development of shadow banking business through the suppression of risk control mechanisms and information screening mechanisms to achieve.Finally,in view of the commercial bank shadow bank business standard development and the risk control,we proposed the corresponding countermeasure from the different stratification plane.Specifically speaking,from the national macro level,one is to unify the scope and standardize the development of shadow banking business,the other is to speed up the process of interest rate marketization and guide the development of shadow banking business;Third,we should perfect the legal system of shadow banking and standardize the business of shadow banking.Finally,we should rely on the development of financial technology to make finance serve the real economy better.From the aspect of financial supervision,the shadow banking business of commercial banks is a part of the financial system,and the mode of financial supervision must be adjusted,from separate supervision to comprehensive supervision,and the flexibility of supervision index must be improved,we will carry out regulation by stages and categories,establish a regulatory system that is compatible with each other,and strengthen coordination among regulatory authorities.We will actively make good use of financial technology to promote effective financial regulation.From the perspective of commercial banks themselves,it is necessary to clarify the boundaries of shadow banking business,adopt different management modes of shadow banking business,and prevent cross-infection of risks,to open up new business models;to improve the transparency of bank statements and facilitate the detection of shadow banking risks;to strengthen the use of advanced financial technology and effectively curb the development of shadow banking,to reduce the systemic financial risk and the risk of bank default.There are some innovations in this thesis,which are as follows: First,the object of study is novel.This thesis starts with the micro-subject of Commercial Bank,discusses the shadow banking business and its risks,and realizes the combination of shadow banking and Commercial Bank.In the relevant literature,shadow banking is regarded as an intermediary institution and an integral part of the financial system,which is rarely analyzed from the perspective of commercial banking.Second,the research content is more comprehensive.Combining the bank default risk with the systemic financial risk,this thesis discusses the risk of the shadow banking business,and controls the risk effectively from the aspect of restraining the scale of the shadow banking business.Previous studies focused on the analysis of a certain level of shadow banking risk diffusion effect,and this thesis not only analyzes the shadow banking risk on its own level,it also analyzes the risks of shadow banking in the financial system.The two different levels of risk also show different heterogeneity,and the transmission mechanism of shadow banking affecting the two big risks is also different.Accordingly,we should effectively control the two big levels of risk from different angles,regulating the development of shadow banking business of commercial banks.Third,the timeliness of the study is strong.Combining the development of the shadow banking business and the financial technology,this thesis discusses how the development of the financial technology can effectively restrain the development of the shadow banking business and reduce its risk.The development of financial technology helps to restrain the shadow banking business scale of commercial banks,and thus to restrain the spread of its risk.In the era of digital economy,the development of financial technology has brought great influence on the financial system.This thesis chooses the shadow banking business at the level of commercial banks as the research object,this thesis focuses on the effective governance of fintech to its risks,thus effectively linking fintech with shadow banking,which provides a new perspective for effectively controlling the risks of shadow banking.