Study On The Macroeconomic Effects Of The Shadow Banking System In China

Since global financial crisis outbroke in2008,"Shadow Banking"——the new financial term has become a focus of academic and economic community. Most scholars believed that the collapse of the shadow banking system was the fundamental cause of this financial crisis. Although there is not a scientific and clear definition of shadow banking system at present, but what is clear is that the shadow banking plays a key role in credit intermediary, free from regulatory authority.In this paper, from the point of financial structure, the author analyzes the causes of China’s shadow banking system, the relationship between the shadow banking system and economic development, monetary policy or other issues. Shadow banking becomes a system which could be parallel with traditional commercial banks. The development of shadow banking system is under the background of financial repression. Under the dual financial structure, traditional commercial banks and the shadow banking system coexist. This paper constructs a linear model, proving that there is an equilibrium interest rate making the maximum investment. Thus, the existence of the shadow banking system can improve the efficiency of capital allocation, maximizing investment level and promoting economic growth. Credit intermediary function of shadow banking system has a correcting effect on the traditional money supply model, increasing the money supply and to a certain extent, affecting the effect of monetary policy. Through the analysis, the effect has an asymmetric characteristic, amplifying the effect of a loose monetary policy during the recession and inhibiting the effect of tight monetary policy during the boom. In the empirical research, this article selects the rapid expansion of the shadow banking system in2006-2013, by constructing SVAR model using monthly data and analyses the mutual influences of the shadow banking system, the macroeconomic variables and monetary policy variables. The impulse response graphs show that the scale of the shadow banking system and economic growth influence each other. Under the condition with the impact of interest rate, the loan and the scale of the shadow banking system change in opposite, which proves that the influence of shadow banking system on monetary policy is asymmetric. The shadow banking system has no obvious booster effect on inflation, but high price level promotes the growth of the shadow banking system.Finally, according to the theoretical analysis and empirical research, the paper puts forward research conclusions and policy suggestions including establishing the macro-prudential framework, perfecting laws and regulations, speeding up the interest rate marketization and improving risk management shadow banking system of to guide the healthy development of the shadow banking system.