The Thinking Of Potential Penetration Risk Of Shadow Banks Against Commercial Banks

Chinese shadow banks featuring "high risk, high return", have been soaring over these years, significantly improving currency’s liquidity of financial markets while tempting traditional commercial banks with higher profit. They have been cooperating with commercial banks by loans for nominal raising financial products, trust transfer, transfer of credit assets, notes arbitrage, financing assets into financial asset pool.On the other hand, it is considered a financial innovation, expanding service revenue and filling the gap of loan expansion generated by external constraints such as macro currency policy and control of industry scale. Meanwhile, shadow banks twist effectiveness of financial resource allocation, evade supervision, eliminate the effect of central bank’s open market policy, and rise commercial banks’system and reputation risks,his article simply explains the issue of liquidity and researches the extent to which shadow banks shake hands with commercial banks bv most common products> the development of Financial products and flow direction of Financial products. In addition, this article reveals the increase of shares of non-interests revenues out of commercial banks’whole net profits by explaining revenue structure of 13 public banks. The reconstitution of revenue structure is seemingly a positive adjustment of profits, but massive potential risks remains to be taken account.Many assets have been off-the-balance-sheet by Financial products. The profit disparity between deposit and loan interests has been shorten due to overdevelopment, leading banks to non-interest revenues, which would not be restricted to bank reserve deposit, capital sufficiency, control of loan scale and financial leverage. Capital outflows are made by trust or other financial institutions, instead of commercial banks, a sales conduit. Reconstruction of bank revenues does not optimize its structure and operation, but reduce risk measurement or even wipe it out. Once investors’interests cannot be guaranteed, the reputation of commercial banks would be affected.With standard and statistical analysis, after researching risks to commercial bank generated by shadow banks. The conclusion of this paper is that the existing accounting standards can not be quantified the potential risk of financial products off balance sheet business, by reference to the Basel agreement, set risk weights determination of bank assets and off balance sheet credit risk. The proposal should be more perfect our commercial bank sheet products and innovative financial products to improve the regulatory system, some banks and asset default cost, to offer different levels of risk to should be more clearly the direction of investment, and make clear its element changes the impact on earnings in various. At the same time, accelerate the marketization of interest rate.