Asymmetric Effect Of Monetary Policy On Shadow Banks

In recent years,the monetary policy adopted by the Chinese financial authorities can generally be summarized in these several stages:From the financial crisis to 2010,the financial authorities mainly adopted a moderately loose monetary policy,and then a prudent monetary policy after the fourth quarter of 2010.In the fourth quarter of 2014,People's Bank of China reduced the deposit reserve ratio twice for the sake of liquidity.And now a stable and neutral monetary policy has been implemented since the second quarter of 2017.The adjustment of monetary policy will have an immediate impact on economic society.Monetary policies with different orientation exert different influence on economic society.In particular,the system of shadow banking is closely related to monetary policy.As an important component in the realm of financing,shadow banking has received increasing attention and concern in academic community.Compared to commercial banks,shadow banking is subject to weaker regulation,which leads to the particularity of shadow banking.There should be a dialectical view on the development of shadow banking.On the one hand,shadow banking plays an active role in the allocation of resources;on the other hand,the risk of shadow banking continues to accumulate.Therefore,the study on the system of shadow banking will be of great value to fulfil its function in the allocation of financial resources and the maintenance of financial system's stability.This study focuses on the connect between monetary policy and shadow banking so as to get better understanding about the behavioral characteristics of shadow banking's respond to the changes in monetary policy.In this study,the monthly data from March 2009 to December 2017 is selected as a sample and TVP-VAR model is adopted to do empirical analysis.It is found that monetary policies with different orientation exert different influence on shadow banking.In terms of tightened monetary policy,the scale of shadow banking will increase,which means shadow banking responds more positively to tightened monetary policy;while for expansionary monetary policy,the scale of shadow banking will be inhibited,a negative trend to some degree.In this paper,the researcher calls this kind of phenomenon the asymmetric effect of monetary policy on shadow banking.