Research On China 's Shadow Bank Business Model

Compared with shadow banking outside China, shadow banking inChina is still in its infancy. It has its special function in current situation,such as providing fund for medium-small sized company and promotingthe integration of the finance system. However, there are someunavoidable problems. In order to figure out the role of shadow bankingin China and also seek for solutions for existing problems, the paper picksbank-trust cooperation as a typical to study how shadow banking in Chinaruns. This cooperation in fact is not under the supervision of traditionalsupervision, but it is conducted by banks which are under that supervision.To study financial product and service in micro aspect helps usunderstand how shadow banking in China runs and find out the hiddenrisks. To understand how shadow banking is localized in China, thecurrent business format has to be studied and understood. Also, it willhelp us to see where shadow banking in China is heading. This paper triesto find out shadow banking’s positive effect as well as provide advice fordecision-makers on how to guide and regulate shadow banking in China.