| Shadow Banking,is a term for non-bank financial intermediaries that provide services similar to traditional commercial banks but outside or lack of normal financial regulations.Since the 2008 global financial crisis,Shadow Banking System has been seen as one of the root causes of the crisis and has caught various attention and discussion.Internationally,Shadow Banking includes hedge funds,non-bank institutions such as money market funds,securitization vehicles,as well as financial derivatives,with characteristics of complex structure,hidden operation,high leverage,and uncovered by financial safety net.Therefore,Shadow Banking causes systematic financial risks and intensifies the spread of crisis.In recent years,the US,UK,EU and other entities have already initiated financial regulation reform,which is on the basis of traditional micro-prudential regulation,enhances macro-prudential regulation of financial system and financial consumers protection.The reform reflects the idea of "Twin Peak" Approach of macro-prudential reform and conduct regulation,comprises the idea of strengthening Shadow Banking regulation.International organizations including IMF,FSB have also enhanced the exploration of Shadow Banking System risks and its management.Domestically,coexistence of financial deepening and repression brought room for the occurrence and development of Shadow Banking System.Since 2011,particularly,main stream of Chinese monetary policy turned from moderately accommodative to prudent,expansion of traditional banking system has been restrained,which brought Shadow Banking explosive growth,providing facility for market entities unable to finance from normal channels.Meanwhile,risks and its negative impacts on the economic and financial systems started to expose,which have drew various attention,especially from regulators.Practically,in order to prevent and mitigate Shadow Banking System risks,and maintain overall stability of the financial system,China has already introduced a lot of regulations.However,the overall problem-oriented and passive regulation has led to insufficient regulation on Shadow Banking arbitrage,and its risks are still accumulating in different forms,the efficiency of regulation is in dire need of studies and improvements.This article is committed to answering four core questions concerning the efficiency of Shadow Banking regulation.Firstly,what kind of regulation is efficient for Shadow Banking System?Secondly,what are the factors affecting the efficiency of Shadow Banking regulation?Thirdly,is Chinese Shadow Banking regulation efficient?Fourthly,how to improve the efficiency of Chinese Shadow Banking regulation?Therefore,this article firstly reviews relevant literature on the efficiency of Shadow Banking regulation,including its definition,scope,causes,impacts,judgment of regulation efficiency,as well as advices on the improvement of regulation efficiency.Secondly,this article introduces "Twin Peak" financial regulation,macro-prudent regulation,Principal-Agent Theory,Game Theory,etc.,analyses the relationship between these basic theories and Shadow Banking regulation,which lays the foundation for this article.Even though Shadow Banking has already drawn extended attention and discussion from various countries,its manifestation and development in different countries differs from each other.In order to make a clearer definition and analysis,this article makes definition and explanation of Shadow Banking in China with combination of existing research and regulation documents,focuses on the composition and development of Shadow Banking in China,analyses the general and Chinese characteristics of Shadow Banking System,dissects risks of Chinese Shadow Banking System from the perspectives of financial macroeconomic regulation efficiency,systemic financial risks,financial consumer protection.On the basis of basic and extended Principal-Agent Model Analysis between regulators and Shadow Banking,this article believes the efficient Shadow Banking regulation is through rational contract arrangements,making consistent goals and directions for both regulators and Shadow Banking,so as to maximize the regulation efficiency with the backdrop of participation constraints and incentive compatibility constraint for Shadow Banking.On the basis of "Twin Peak" financial regulation,the reconstruction of Shadow Banking regulation goals and observation index as well as the improvement of incentive compatibility between regulators and Shadow Banking are crucial to releasing efficient Shadow Banking regulation.On the contrary,insufficient incentive compatibility,problems in the system of regulation goals and the setting of regulation index would constrain the efficiency of Shadow Banking regulation.Furthermore,this article utilizes Evolutionary Game with Bounded Rationality to deduce game relations amongst macro-prudential regulators,micro-prudential regulators,conduct regulators and Shadow Banking,and gets the judgments of effective regulation and how the improve three regulations,based on the Game equilibrium perspective.On the basis of theoretical analysis,according to our country's Shadow Banking regulatory practice and the research results of the effectiveness of financial regulation,this article has established the efficiency index of Chinese Shadow Banking regulation.Through the study of relevant empirical results,the efficiency of Chinese Shadow Banking regulation are yet to be satisfied generally in these years,there are still more to be improved in terms of prudential regulation and conduct regulation:firstly,weak regulation on Shadow Banking risks contagions,secondly,severe fluctuation in Shadow Banking credit arbitrage regulation,thirdly,relatively sound micro-prudential regulation,while downgrading since 2014,fourthly,regulators have made processes in improving investors' confidence and decreasing financial costs for real economy,however,consumers of shadow banking have relatively unstable profits,regulation wills are vacant.At last,this article combines specifications and empirical results,draws from international experience,provides suggestions from the perspectives of regulation concepts,institutions,measures and tools,coordination mechanism of the establishment of the Trinity regulation framework of macro-prudential,micro-prudential and conduct regulation,so as to improve the efficiency of Chinese Shadow Banking regulation.The outcome of this article brings reference and inspiration for China to identify Shadow Banking regulation goals,to establish systemic regulation framework of Shadow Banking,and to improve the efficiency of Shadow Banking regulation.Meanwhile,this article provides an important analysis angle for current deepening financial regulation reform in China. |
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