The Research On The Effect Of Shadow Banking On The Bank Stability In China

The global financial crisis caused by the U.S. subprime mortgage crisis has a huge impact on the world economy and caused the attention of "shadow banking" by scholars. China’s shadow banking has absolutely huge scale, and the growth rate is high in recent years, becoming an important part of social financing. Because of high leverage, lack of supervision, low transparency and maturity mismatch and other reasons, shadow banking has great potential risk. China is a bank oriented countries. All aspects of social and economic fields are related to the stability of banking system. After analyzing theories about shadow banking, banking system and the effect between them, this paper tries to put forward the policy suggestion about the healthy development of China’s shadow banking.Based on China’s shadow banking scale and growth speed, this paper analyzes the influence of the development of shadow banking on the stability of the banking system in China. First of all, this paper definites the shadow banks and the stability of the banking system on the basis of previous research. Combing the relevant theory this paper analysis the influence mechanism between them. The influence of the shadow banks on the stability of the banking system both positive side and negative side. Secondly, from a quantitative point, this paper measures the scale of China’s shadow banks during 1992-2014, and the bank system stability from 1992 to 2014 in China, using Eviews empirical analysis the relationship between shadow bank scale growth rate and the stability of the banking system. Finally, combined with China’s current development of shadow banking shortage, this paper puts forward some policy suggestions on how to realize and regulate.Through the analysis, this paper draws the following three conclusions: first, the stability of China’s banking system has some volatility, but overall, it has increasing trend of stability. Second, this paper argues that the shadow banking scale growth rate is not as fast as possible. It has a optimal value. The results showed that the growth rate of the shadow banking scale influence on the stability of the banking system is nonlinear and there is a threshold effect, when the shadow bank scale growth rate in the optimal threshold. When the growth rate of the shadow banking scale is near the optimal threshold, the banking system keeps stable. When the growth rate of the shadow banking scale is higher or lower than the optimal threshold, the shadow banking will become the factor of instability in the banking system. The calculation results showed that the optimal growth rate of Chinese shadow banking scale is 28.3%. Third, In recent years, the growth rate of Chinese shadow banking scale is close to the optimal growth rate. It indicated that China’s shadow banking has changed past unreasonable high speed development mode and played an important role in promoting the stability of the banking system. Finally, in order to promote the healthy development of the shadow banking system, this paper proposed the following suggestions: the first is a rational understanding of the shadow banking. The second is to establish perfect macro regulatory system. The third is to establish a firewall between shadow banking and bank system. Fourth is paying attention to the cultivation of high-quality talents of financial supervision.