The Empirical Study Of Shadow Banking Size's Effect On The Profitability Of Commercial Banks

The outbreak of the 2008 financial crisis has made the concept of “shadow banking” more and more scholars aware and concerned.Because different countries have different economic development processes,different countries have different definitions of shadow banking,but most scholars believe that shadow banking has the characteristics of financial innovation and lack of supervision.In recent years,China has continued to promote the process of interest rate marketization reform,which has made the competition among financial products in the financial market increasingly fierce.The scale of shadow banking has continued to expand.The traditional profit model of China's commercial banks mainly relying on the difference between deposit and loan interest rates has been continuously Shock.As an important part of China's financial system,commercial banks' operations have largely influenced and even determined the development of the entire financial system.Therefore,to explore the impact of the scale of shadow banking on the profitability of commercial banks is of great significance for maintaining the profitability of commercial banks and ensuring the smooth operation of commercial banks.The impact of shadow banking on the profitability of commercial banks has two aspects.On the one hand,shadow banking increases the intermediary business income of commercial banks,on the other hand,it has a crowding out effect on the traditional business of commercial banks,making commercial banks in the financial market.Bargaining power is weak.This paper first introduces the development status of China's shadow banking,and theoretically analyzes the reasons and path of the impact of shadow banking on the profitability of commercial banks.Secondly,China's shadow banking business is divided into two types: the banking system and the shadow banking outside the banking system.According to this,the scale of China's shadow banking in 2005-2017 is counted.Then use the commercial bank profitability evaluation index ROA to estimate the profitability of China's 18 sample commercial banks in 2005-2017.Finally,the panel data model is used to empirically analyze the impact of China's overall shadow banking scale and different types of shadow banking scale on the profitability of commercial banks.The results show that,first,the impact of the overall shadow banking scale on the profitability of the full sample banking system is inverse U-shaped,with a threshold of 37.77 trillion yuan,which appeared in 2013.That is,when the size of the shadow bank is lower than the threshold,as the size of the shadow bank continues to expand,the profitability of commercial banks will increase.After the threshold is exceeded,the profitability of commercial banks will continue to decrease as the size of the shadow bank increases.Second,different types of shadow banking have different impacts on the profitability of the banking system.The shadow banking business in the banking system and the shadow banking business outside the banking system and the bank's profitability are both inverted U-shaped,but their thresholds are different.They were 24.1 trillion yuan and 22 trillion yuan respectively,which appeared in 2017 and 2014 respectively.Finally,this paper proposes relevant policy recommendations for empirical conclusions.China's regulatory authorities should clarify the main body of shadow banking supervision;customers should watch the shadow banking business to ensure reasonable and effective supervision;establish an early risk early warning system to effectively block the risk communication channels;increase the proportion of financial innovation business and achieve the purpose of improving the profitability of commercial banks.