The Scale Of China’s Shadow Bank And Its Effect On The Stability Of Banking System

The rapid growing shadow banking system in recent years has become an importantpart of Chinese financial system. On one hand, shadow banking prompts the operationand profit level of banking. On the other hand, shadow banking system weakens the creditintermediary value of banking, and enlarges the financial market systemic risk for its highleverage, maturity mismatch and high correlation.The paper selected annual data from1987to2012, we first estimated the size of theshadow banking from the perspective of credit demand, The basic principles of economicand financial relations based on: a time of economic agents to achieve GDP is composedof all credit support during this time of financial institutions from the perspective of theborrower measure the size of the shadow banks，then summarizes the existing literatureon methods for measuring the stability of the banking system, a comprehensive index isbased on the value indicators measure the stability of the commercial banking system isabout to fall into three categories: indicators of macroeconomic variables, financialvariables indicators and indicators of commercial banks according to systemic bankingrisk (financial indicator variables, macroeconomic indicators variables) and non-systemicbanking risks (commercial banks indicator variables) to measure research，anotherconstructed index BSSI is based on the leading indicators of the banking crisis to monitorthe Chinese banking system’s impact resistance and stability, compared with the twoanalysis methods, and finally select BSSI index and the relative size of the shadowbanking empirical analysis by simulation data, the conclusion is that the development ofthe shadow banking has had a dual impact on the stability of the banking system.The main conclusion is that the Chinese shadow banking size has the thresholdeffect on the commercial banking system stability. When the shadow banking relativescale is below the threshold, which is21.36%in this paper, the expansion of the shadowbanking relative scale will enhance the level of stability of the commercial bankingsystem；When the relative size of the shadow banking is larger than the threshold, theexpansion of the relative scale of the shadow banking will lead to the decline of thecommercial banking system stability. After the mechanism analyst, the thesis usesempirical research to analysis the influence of shadow banking to the stability of banking,gives an important practical basis to view the shadow banking development fairly anestablish a sound regulatory system.