Research On Chinese Shadow Banking Regulation

With the rapid development of financial innovation and the "financialdisintermediation", the structure of financial market is plural. Shadow banks in recentyears has become a new marketing mode of China’s financial sector, It supplementedthe financial needs which cannot meet formal financial institutions and financialsystem. But with the shadow bank lending scale rapid expansion, the risks to thefinancial system have gradually emerged, development of the shadow bankingunusual has been a serious threat to the financial stability in China. Under thebackground of global regulators calling to rectify the "shadow banking",strengthening the regulation of the shadow banking is urgent. In this paper, at thesame time of using the experience of international regulation, combining the actualconditions of China’s financial supervision, it regulate the shadow banking andcorrectly guide and standardize the informal lending behavior to make its healthydevelopment. Leading to the financial system play a positive role in financing andcontribute to the development of Chinese financial industry better. The paper consistsof six chapters:In the first chapter, this paper introduces the background and significance of thetopic, and briefly elaborates some important research results and research idea of thedomestic and foreign scholars in related fields. This article analyses the risk of ourshadow banking, expounds China’s shadow banking regulatory status quo andexisting problems, and sums up the experiences of international regulation,combining the actual conditions of China’s financial supervision at the same time, forperfecting our shadow banking supervision countermeasures.In the second chapter, it mainly summarizes the theoretical basis of thedevelopment of Chinese shadow banks. Firstly, it combines with the research ofscholars both at home and abroad to define the shadow banking, and analyses thedifference between shadow Banks at home and abroad. Secondly it summarizes thecharacteristic and the manifestation of China’s shadow banking. Finally it elaborates the cause of shadow banking emerging. This paper argues that monetary tightening isthe root cause of shadow banking, financial innovation boosts shadow bankingdevelopment and dual-track interest rates grow the size of the shadow banking.In the third chapter, it mainly analyses the influence of Chinese shadow bankson financial system. Firstly, it analyzes the positive impact of shadow banking andthe certain rationality of the existence of the shadow banking system. Shadow bankssupplement the financial requirements which can’t satisfy by formal financialinstitutions. The existence of the shadow banking system is conducive to promote thedevelopment of financial innovation. Secondly, this article analyzes the risk andnegative effects which shadow banking has on commercial Banks, monetary policyand financial stability.In the fourth chapter, this article mainly introduces the current situation offoreign shadow banking supervision and its enlightenment to china. This partanalyses the regulatory measures of the United States, Britain, the European Union,FSB to the shadow banking measures. This part summarizes reform measures to theshadow banking which the current international has had for strengthening regulatory.This part draws lessons from international experience and combines with China’sactual for developing Chinese shadow banking regulatory measures.In the fifth chapter, it mainly analyzes the present situation of the shadowbanking supervision and existing problems in China. Firstly, it analyzes the regulatorystatus quo and regulatory difficulties of our regulatory authorities to credit assets,bank-trust cooperation, financial products, network borrowings, private financial.Secondly, this part analyses the problem of shadow banking supervision in ourcountry comprehensively. This article argues that there are regulatory vacuum,financial measures not in place, financial regulatory lag behind financial innovation incurrent shadow banking regulatory.In the sixth chapter, it mainly puts forward suggestions aiming at the existingproblems in Chinese shadow banking supervision. Firstly, in terms of perfectingcountermeasures of shadow banking regulators, it is suggested to guide the shadowbanking development correctly and reasonably, set up the concept of functionalsupervision, gradually promote the innovation in financial products. Secondly, in terms of perfecting shadow banking self-discipline, shadow banking internal controlmechanism should be improved. A firewall between shadow banks and commercialbanks should be set up. Thirdly, in terms of perfecting the market discipline, weshould improve the system of information disclosure and establish laws andregulations covering the shadow banking. Finally, we should promote the reform ofthe market interest rate actively.