The Study Of Chinese Shadow Banking System Risk Transfer Mechanism And Vulnerability

In recent years,the Chinese Shadow Banking System has emerged from both the adjustment of economic structure and the reformation of financial system.On one hand,this shadow banking system,the scale of which expanded fast in a comparatively short-time period,has promoted the economic development and activated the financial market to some extent.On the other hand,due to the risk characteristics of its contents,the shadow banking system has become a hotbed for economic and financial risks to agglomerate.As a result,some significant issues,which include the development process of the banking shadow system,the operational characteristics,the connection with commercial Banks and the relationship between the risk transfer mechanism and the systemic risk,are not only seriously concerned by regulators and financial institutions,but also emphasized as worthwhile research subjects in the field of economics.This paper will carry out related research based on these issues.Through the recognition of the Chinese shadow banking system and based on the analysis of its development,this paper discussed the relationship between shadow banking system and vulnerability,and has found the characteristics that the development of Chinese shadow banking system is led by commercial banks.This paper further imitated the infection mechanism of risk through constructing the heterogeneous financial network system model which contains commercial banks and shadow banking system;analysed the financial system fragile factors by establishing a Dynamic Stochastic General Equilibrium model(DSGE)which includes a shadow banking system and measured the risk degree through establishing the stress index of systematic risk.Finally,this paper put forward the policy suggestion and constructed a comparatively complete theory to prevent risk under the shadow banking systemThis paper mainly obtained six conclusions:First,the shadow banking system is significantly driven by commercial banks.Second,the growing shadow banking system in China has been basically initiated by commercial banks to escape the regulatory control on credit expansion and to gain the abnormal profits from non-standard credit expansion through arbitrage activities of exploiting the policy discrepancies between different financial regulatory bodies.Third,the association between commercial banks and shadow banking,which was generated from trade business and interbank assets,has led to the establishment of financial network with risk transmission and has increased the risk level of the financial system.Fourth,a new financial risk-transfer mechanism is ripening and maturing in the new financial system.Fifth,the financing price of the shadow banking system is very easily influenced by driving factors,which can cause financial systemic risk.Sixth,the Chinese financial system becomes fragile when commercial banks evade from regulations and make interest arbitrage and develop Chinese shadow banking system,which further causes high leveraged investments and term mismatch in the complicated financial system.In the economic ascending period,numerous individual businesses’ ignorance in systematic risk will aggravate the pro-cyclical effect.When the short-term capital rises rapidly in the market,the capital chain will break and induce systemic risk.This paper is innovative in respect to the following respects:First,it pointed out that the main characteristic of the Chinese shadow banking development is the dominant influence of commercial banks,which is the key foundation of this paper.Second,for the first time it established the heterogeneous financial network system model of commercial banks and shadow banking system,carried out risk transmission simulation experiment according to the current situation of Chinese financial system and innovated in setting the bank regulatory arbitrage impulse coefficient.Third,in the DSGE model,it established the asset transfer mechanism from commercial banking sector to the shadow banking system.Fourth,it used the method of financial stress index to construct the stress index of systemic risk.