The Research Of The Impact Of Shadow Banking On China's Monetary Policy Objectives

Shadow banking is the product of financial innovation,which has been booming since the financial liberalization in 1980.Because of the lagging of financial regulation,it is considered to be the driving force behind the 2008 financial crisis surfaced.At present,with credit conversion,high leverage,regulatory arbitrage and other risk characteristics of shadow banking has become a hot topic of discussion in the academic circle.In the past ten years,our country experienced great changes in the financial sector.With the rapid expansion of bank's off-balance sheet business,increasing of direct financing,and the funding gap behind the macro economy,shadow banking scale presents the rising trend year by year.The different from the western countries is China's shadow banking business has not complex securitization process.Its product chain is short;the underlying assets is single,the scale and complexity degree of the product design has still a certain gap between the western countries.However,regulatory arbitrage,after all,is the key to the shadow banking.Just as what global financial crisis reveals in the eight years ago,we should pay attention to the development of the shadow banking,which may be eroded the commercial banks and even the domain of the traditional capital markets,to bypass the macro-regulation of our country,fundamentally weakened the base of monetary policy regulation of monetary authorities.So,what are the shadow banking business of our country and how large is the scale at present?Whether the shadow banking in China has financial risk of trigger the subprime crisis,similar to the U.S.?How much deviation will the shadow banking produce on monetary policy objectives?How to carry out the prospective specification regulation and optimize the monetary policy?These issues will be need to be deeply discussed in this paper.This paper starts from the theory of several kinds of shadow banking,and analyzes the development of the shadow banking,summarizes several common shadow banking business,through the comparison of Chinese and foreign shadow banks summed up characteristics of shadow banking in our country.Then,the paper explains the impact point of shadow banking on money supply,rate and other monetary policy targets from the theoretical basis.In empirical research part,this article will divide shadow banks into observable parts and observation to calculate the scale respectively,and use 54 groups of macro quarter economic data,from the first quarter of 2003 to the second quarter of 2016,establishing the vector auto regression model to analyze the relationship between shadow banking and monetary policy objectives.The following conclusions are drawn:the shadow banking and money supply is to promote each other,resulting increase the endogenous of money supply,which leads to rise in prices.Shadow banking causes a slight rise of interest rates in the short term,but the relationship between the shadow banking and interest rate is relatively weak.Shadow Banks promote the economic growth in the short term,however,caused a big hidden danger to economic output level in the long term.At the end of this paper,based on the previous research,this paper puts forward some policy recommendations with pertinence and practical on the basis of the regulation of the shadow banking supervision and optimizing adjustment of monetary policy.