Shadow Banking And Systemic Risk Of Commercial Banks Under The Policy Uncertainty

Since the 18th National Congress of the Communist Party of China,China has always stressed that "we must put prevention and control financial risks in a more important position." Preventing and defusing systemic financial risks has become the primary mission of financial supervision.And it is important to control the risk and maintain the stability of the banks which play an important role in the financial system.Recently,the disturbance factors at home and abroad have increased,and the uncertainty of economic policies has risen.Under this background,how will the systemic risk of China's commercial banking change?Based on this,this paper takes Shadow Banking as the entry point,uses ?CoVaR to measure the systemic risk of banks,takes the non-balanced panel data of 16 listed banks in China in 2008-2017,and uses methods of fixed-effect two-stage and system GMM to focus on the impact of Shadow Banking on the systemic risk of commercial banking.Furthermore,this paper explores the role of economic policy uncertainty between Shadow Banking and systemic risk of China's commercial banks.Through the research,we find that:(1)Shadow Banking will improve the systemic risk of China's commercial banks,and the impact on the systemic risk of small and medium-sized commercial banks will be more significant,but the impact on the systemic risk of large commercial banks is not significant.(2)Secondly,the higher deposit reserve ratio reduces the systemic risk of commercial banks,indicating that the tightening monetary policy is conducive to curbing the risk of banks.(3)What's more,we also find that under the background of China's current economic policy uncertainty,systemic risk caused by Shadow Banking can be weakened by economic policy uncertainty.(4)Finally,in further exploration,this paper finds that economic policy uncertainty will have a negative impact on Shadow Banking business,that is,in an environment with high economic policy uncertainty,commercial banks may reduce Shadow Banking business.