| The relative significance of the “shadow banking system” increased gradually ever since the 2007/08 global financial crisis.Lately,the successive collapsing peer-to-peer lending platforms(P2P platform,which can be regarded as one form of shadow banking activities)makes the shadow banking system return to the limelight.On the one hand,engaging in shadow banking has a positive effect on commercial banks.The shadow banking businesses enable commercial banks to fully utilize their own funds.While broadening their profit channels and increasing profit income,they also meet the financing needs of the society and inject vitality into the real economy.On the other hand,the essence of shadow banking is the “Quasi loan” business.It is a kind of regulatory arbitrage and has the characteristics of strong concealment,low transparency and high leverage.It hides credit assets or transfers them to the off-balance sheet,which not only brings great risks to the bank itself but also increases the difficulty of supervision.As the risks accumulate within the banking industry,the stability of the entire banking system is bound to be affected,and the risks faced by the banking system are increasing.It is urgent for the regulatory authorities to issue relevant documents for effective supervision.This paper selects data from 209 Chinese commercial banks’ annual reports during 2007 to 2016,measures the scale of commercial banks’ shadow banking businesses from asset perspective of the balance sheet,constructs relevant models,and uses the Stata14.0 software to conduct empirical research.The main research question is investigating the impact of commercial banks’ shadow banking businesses on their risk exposure and its transmission mechanism.In order to further analyze the impact of external financial supervision on the relationship of the size of the shadow bank and risk-taking,the product of the financial supervision(SUP)and the shadow banking scale(SHADOWSUP)is used to analyze whether the financial supervision will strengthen or weaken the impact.In addition,in order to check the possible sample selection errors and the robustness of the test results,this paper selects two grouping variables according to bank categories.On the one hand,this paper introduces the virtual variable foreign exchange(FOREIGN),and divides the sample into foreign-funded banks and Chinese-funded banks.On the other hand,this paper also introduces the virtual variable agricultural commercial bank(AGRI),and divides the sample into agricultural commercial banks and non-agricultural commercial banks.Then,this paper chooses the appropriate method to regress the above four samples separately,and verify whether the samples with different characteristics will affect the significance of the conclusion.The conclusions are as follows.First,the increase in the scale of the shadow banking businesses has significantly increased the risk of commercial banks.Among them,the shadow banking businesses has led to a significant decline in the return on assets,equity ratio and the volatility of asset yield.Although the decline in the rate of return on assets will reduce the risks faced by commercial banks to a certain extent,the increase of risks brought up by the return on assets and equity ratio will far exceed the decreasing impacts.Second,the strengthening of external supervision will weaken the negative impact of the shadow banking businesses on the bank’s risk.Third,regardless of the type of commercial banks,as long as it is engaged in the shadow banking business,it should bear greater risks.Finally,combined with the downward trend of economic indicators such as the expansion of the social integration gap induced by the current state’s strong supervision measures,this paper proposes policy recommendations for the healthy development and supervision of China’s commercial banks’ shadow banking business. |
