Threshold Effect Study On The Scale Of Shadow Banking System And The Profitability Of Commercial Bank In China

Capitalizing on social idle funds to provide the necessary information and risk management tools to financial intermediation is the most important function of the financial system to promote social and economic development.As the main body of China's financial system,commercial banks operating conditions greatly influence or even determine the developments in the financial system,and for the management of long-term liabilities of commercial banks,once the key lender of financial management runs crash,the risk will pass quickly through commercial banks to the entire financial system.Therefore,at this stage that indiect finance is still the main finance of China,to maintain the profitability of commercial banks to a high level,to ensure the safe and stable operation of commercial banks,is important for the maintenance of the stability of the entire financial system.Many people think that as the overcapacity,real estate,local financing platform and other areas of financial risk,Chinese shadow banking is the most likely outbreak.So recent years,under the strong regulatory measures of government,funds depend on which t turned its financing back to he shadow banking system formal financial institutions,as a result,the shadow banking market shrinking,growth tends to be slow,and formal financial institutions credit get a lot of traffic recovery but not been achieved doubling profits at the same time,isteadly,more and more small and medium enterprises run to troubled business due to the high cost of financin,which disorder economic operation.Therefore,there is no doubt the shadow banking provides a new vitality for small and medium enterprises,continuing operations of small and medium enterprises can be inseparable from strong support of shadow banking,shadow banking plays an irreplaceable role in sustaining the economic development,promoting financial reform,it is not necessarily to blindly curb the size of shadow banking system to give greater profits to traditional financial institutions.In this paper,the shadow banking has been clearly defined,the mechanism of influence of shadow banking and commercial bank profitability has been greatly clarified,with the annual data from 2004 to 2014,we measured the size of shadow banking system and the profitability of commercial banks.With the support of STATA12.0,we did a study on the relationship of Quantitative relation between the two,.The empirical results show that a threshold effect exists between the size of the shadow banking and commercial bank profitability,as the shadow bank size is below the threshold,the expansion of the size of the shadow banking will enhance the ability of commercial banks to obtain income,On the contrary,the profitability of commercial banks will be greatly affected.