An Empirical Analysis Of Chinese Shadow Banking Stability Of The Banking System Right

As the degree of the monetization of the economy continues to improve and the proliferation of financial derivatives, the size of the shadow banking is growing rapidly. The shadow banking of endogenous maturity mismatches and high leverage characteristics easily lead to the risk of the bank system. The global financial crisis erupted in2007exposed the enormous destructive power of the shadow banking on the banking system stability. Bank is still in a dominant position in China’s financial system at present. And bank is still the core of China’s financial system. The emergence and development of the financial crisis will inevitably exist in close contact with our banking system. Therefore, to explore the impact of the shadow banking on the stability of the banking system in China will be of great significance to the stability and development of China’s bank system as well as the stability and development of the financial system.In this paper, we comprehensively and systematically analyzed the negative and positive effects of the shadow banking on the stability of the banking system in china with the qualitative and the quantitative analysis,.Annual data from1992-2010is used to measure the size of the shadow banking and the China’s banking system stability, combined with OLS regression model,the unit root test, cointegration test,Granger causality test and Heteroscedasticity test econometric methods,and corresponding model is established to empirically research the relationship between them on the basis of the data simulation. The results show that there is threshold effect between the scale of shadow banking and the stability of the banking system, that when the size of the shadow banking is less than the threshold the development of the shadow banking will improve the stability of the banking system, on the contrary, it will reduce the stability of the banking system. To this end, we can circumvent the adverse effect of the shadow banking on the stability of the banking system from the following aspects: intensify reform, changing concepts and encourage the establishment of private financial institutions and make the shadow banking legalization; strengthen supervision and regulate the shadow banking activities, and collect relevant data on a regular basis as a preventive measure to eliminate hidden dangers; accelerate marketization of the interest rate; strengthen the credit support of the formal financial institutions to private enterprises and individual industrial and commercial households, improve the service quality and innovate the business varieties, to reduce the dependence on shadow banking from the demand side; reduce the leverage of the shadow banking; establish shadow banking regulatory system and strengthen the shadow bank’s information disclosure requirements; the sub-prime mortgage market crisis is the root cause of the financial crisis, so we must focus on monitoring our China’s real estate market.