The Relationship Between Shadow Banking System And Traditional Banking System

The main purpose of this article is to study the origin, development of shadow banking system and its correlation with traditional banking system. The shadow banking system originated from traditional banking system. To a large extent, shadow banking system is the result of securitization. As a result, there are both differences and similarities between shadow banking system and traditional banking system. Shadow banking system exerts great effects on the financial system. On the one hand, shadow banking system is a result of securitization. It raises the leverage of financial liquidity. On the other hand, shadow banking system is out of control. It leads to great financial dangers. At present, the development of shadow banking system is not good in China. Nor has it raised widespread attention. Our country should put more emphasis on shadow banking system and learn the advanced experiences from developed countries. This is to maximize its positive effects and minimize its negative effects.