The Empirical Research On The Effect Of Shadow Banking On The Commercial Banking Stability In China

The rapid growing shadow banking system in recent years has become an important part of Chinese financial system. The shadow banking, as the creation of financial innovation, is inextricably linked with the commercial banking system. On one hand, shadow banking prompts the operation and profit level of commercial banking. On the other hand, shadow banking system weakens the credit intermediary value of commercial banking, and enlarges the financial market systemic risk for its high leverage, maturity mismatch and high correlation. After the mechanism analyst, the thesis uses empirical research to analysis the influence of shadow banking to the stability of commercial banking, gives an important practical basis to view the shadow banking development fairly and establish a sound regulatory systemFirstly, on the basis of domestic and foreign research, the thesis measures the scale of shadow banking system and the commercial banking stability in China. Then, the thesis uses nonlinear regression model to value the influence of Chinese shadow banking scale on commercial banking stability from2002-2012.The main conclusion is that the Chinese shadow banking size has the threshold effect on the commercial banking system stability. When the shadow banking scale is below the threshold, the expansion of the shadow banking scale will enhance the level of stability of the commercial banking system; when the size of the shadow banking is larger than the threshold, the expansion of the scale of the shadow banking will lead to the decline of the commercial banking system stability. In the light of these conclusions, the thesis points out that moderate developing of shadow banking should be allowed and a "standardized" based shadow banking regulatory system is also advised. We should regulate the off-balance sheet business of commercial banking, establish firewalls on the cooperation business between commercial banking and other financial institutions, and also speed up legislation of private financing.