A Study On The Impact Of Shadow Banking' Scale On The Stability Of Commercial Banks In China

After the U.S.subprime mortgage crisis in 2007,the concept of the shadow banking quickly became a hot issue in China,the risk of the shadow banking's characteristics,just like the risk of leverage,excess liquidity,unconscious information hiding,the lack of effective financial supervision,is too high and difficult to ignore.Especially in recent years,with the liberalization of global finance,the continuous innovation of Finance and the gradual loosening of China's financial regulation,shadow bankng is developing at an alarming speed in China,and its proportion of social financing has been increasing.As the main body of China's financial system,Commercial banks are more easily affected by the risk of shadow banking because of its inherent vulnerability,at same time the relationship between Commercial banks and shadow banking is getting closer,therefore we need to do more research on the mechanism,direction and degree of influence of shadow banking on the stability of China's commercial banks.This paper theoretically collated and summarized a large number of domestic and foreign literature on the shadow banking,the stability of commercial banks and the relationship between the two,based on this,the paper introduced the shadow banking from definition and scope and By analyzing the operating characteristics of commercial banks,it teased out the mechanism and specific effects of shadow banking on commercial banks stability.At the same time,for further research from the perspective of quantitative,combining the reality of shadow banking in China,this paper calculated different kinds of shadow banking,build stability index system of commercial banks through the asset quality,capital adequacy,profitability,liquidity four aspects and separately measured the stability index.Finally,based on the results of the shadow banking scale and the stability index of commercial banks,together with the macroeconomic level,market environment and policy factors,the paper by means of establishing VAR model empirically analyzed the effects of shadow banking on the stability of Chinese commercial banks.The result shows that The increase in the size of the shadow bank will reduce the stability of the whole commercial banking system and have a longer duration.For large state-owned banks,the development of shadow banking can effectively improve the stability of state-owned banks in the short term,but in the long run,it is not conducive to the stability of state-owned banks.This study also found that the growth of shadow banking scale has a opposite effect on the stability of joint-stock commercial banks and city commercial banks during the same period,it will enhance the joint-stock banks stability in the early but at the same time will have a negative impact on the city commercial banks stability,then similar to state-owned banks,shadow banking scale started to have a negative effect on joint-stock banks stability,while the city commercial banks would become more stable with the development of shadow banking.