Effects Of Shadow Bank Financing

With the deepening of financial innovation, multi-level financial market appearedgradually, the shadow banking is this one of the important products.Shadow Bankssupplemented the current financial system and meet more financial needs.Concerning thesituation in our country,the operational forms of the Shadow Bank are not enoughdiversity,mainly including the cooperation between banks and trust companies, theentrusted loans, as well as the institutions like the companies of small loans, pawn shopsand other institutions.Based upon the low level of financial innovation the lever use isstrictly restricted,so,In general the Shadow Bank activities can not cause systematic riskseasily. At the same time, with the normal supervision, the Shadow Bank moving to astandardized level becomes the beneficial supplement of traditional financialorganization.So,It could also provide more diverse financing channel for small andmedium-sized enterprises (SMEs) and help to solve financing difficulties of small andmedium-sized enterprises at presentSince the Reform and Opening Up,small and medium-sized enterprises (SMEs) area solid pillar of the national economy.However, due to the self-problem and the externalmarket environment,SME is facing financial problems which lead to the restriction on itsdevelopment.To keep the rapid and effective development of small and medium-sizedenterprises is a basis in maintaining social stability and the rapid development of socialeconomy.It becomes increasingly urgent and significant to solve the problem of mediumand small-scale enterprises financing.With such background considered,based on shadow banks’ development and thepresent situation of national medium and small-scale enterprises’ financing.The study ofthis paper pay most attention on the important role of shadow banking system inpromoting the financing of medium and small-scale enterprises,and analysis the existingproblems.In final,this paper point that our nation should perfect the supervision system andstrengthen the supervision on Shadow banks.This paper tries to give the solutions——assuaging the urgency of small-scale enterprises’ financing.