Research On Money Supply,Shadow Banking Business Scale And Commercial Bank Performance

With the increasing competition in the banking industry,the income structure of traditional banks gradually tilts from on-balance sheet income to off-balance sheet business income.At present,a considerable part of the foreign assets of commercial banks belong to shadow banking assets.Changes in the size of these shadow banking assets will affect the performance of commercial banks and also be affected by the money supply.However,current studies have different conclusions on how money supply affects the scale of shadow banking business,and relatively few studies on how the scale of shadow banking business affects the performance of commercial banks.In addition,no scholars have studied the three together at present.Therefore,this paper aims to explore how money supply will affect the scale of commercial banks’ shadow banking business.How the size of these shadow banking operations will affect the performance of banks;And whether there is an intermediary effect among money supply,shadow banking business scale and commercial bank performance.In order to clarify the relationship between the three,this paper firstly summarizes the current research conclusions.Then,with the help of existing theories,theoretical analysis and mechanism analysis are carried out on the relationship between money supply and shadow banking business scale,money supply and commercial bank performance,and shadow banking business scale and commercial bank performance.On this basis,through empirical analysis,this paper further verifies whether there is a new approach that money supply affects the performance of commercial banks by influencing the scale of their shadow banking business.Therefore,this paper selected the quarterly panel data of 12 large listed banks from2011 to 2021 as the research and analysis object,and demonstrated this approach by combining theoretical demonstration and empirical analysis.According to the empirical analysis,if the M2 is used to measure the money supply and the sum of banks’ purchased and resold assets,interbank loans and deposited interbank assets is used to measure the scale of shadow banking business,the return on equity is used to measure the performance of commercial banks as follows: First,the rise of money supply will significantly increase the scale of commercial banks’ shadow banking business;Second,the rise in the scale of shadow banking is not conducive to the overall performance of banks.Third,rising money supply is detrimental to bank performance.Fourth,money supply,shadow banking business scale and commercial bank performance have partial mediating effect.According to the conclusions obtained from the research,this paper respectively puts forward suggestions for commercial banks participating in shadow banking business and regulators.This paper argues that the regulatory level needs to improve the regulatory system to promote the sunny development of shadow banking.We will improve local financing platforms and increase the efficiency of capital allocation.Commercial banks need to continue to deepen their personal consumer loan business,broaden their business boundaries in wealth management and private banking,and do a good job in digital transformation and upgrading.