China-US Shadow Banking Development, Operation And Learn From Research

Since the2007global financial crisis caused by the U.S. subprime mortgagecrisis, we heard about the shadow banking frequently which is considered to be themain cause of this crisis. The so-called shadow banking is these non-bank financialinstitutions which can finish the liquidity transformation, credit creation and creditintermediation. The shadow banking is supposed to be the important result of the U.S.financial innovation and its Emergence and Development have a specific backgroundof the times. We can tell that the shadow banking is the inevitable result of financialliberalization and financial globalization. At the same time, the shadow banking alsoput forward new challenges on financial regulation. China’s financial industry is in amajor development, major adjustment period. So, there are many institutions andbusiness activities similar to the shadow banking in the financial markets likecommercial bank financial products, bank-trust cooperation, private lending. Thesesimilar shadow banks played an important role in promoting economic developmentand meeting investor’s demand for financial services and corporate finance. However,we cannot ignore the enormous destructive power of the shadow banking in this crisis.With China’s financial and economic development, the proper treatment to the similarshadow banking institutions and the business activities and the lesson we learn fromthe development of the shadow banking regulatory norms are useful to our financialdevelopment. And this is also the starting point and purpose for the study.This paper is divided into six chapters. The first chapter introduces thebackground of this selection and these current theoretical circles at home and abroadon the shadow banking from a theoretical point. The second chapter describes thebackground of the times and realistic basis of US shadow banking based on the U.S.financial regulatory system changes and the development of financial institutions inthe United States. The third chapter makes a comprehensive understanding and graspof the U.S. shadow banking through shadow banking composition, operationmechanism and running characteristics. The fourth chapter describes the effect of the shadow banking double-edged sword for the U.S. financial system based on changeand crisis of the U.S. financial system since the1970s after the U.S. financialregulatory. Then make the point that it is necessary to maintain a certain balancebetween the efficiency of the financial system and maintain financial security in orderto emphasize the future development of financial innovation and financial supervision.The fifth chapter describes China’s shadow banking background and form. Then makecompare to the operational characteristics of the shadow of the Bank of China and theUnited States through the analysis of financial products and bank-trust cooperationmechanism of commercial banks. The sixth chapter makes some reference for ourfuture financial development mainly based on the shadow of China and the UnitedStates above changes.