The Influence Of Shadow Bank On China 's Monetary Policy

The development of China’s shadow banking system is accompanied by the improvement of the domestic financial system. Since the financial crisis, with the transformation of China’s macroeconomic regulation, the development of China’s shadow banking comes to the peak. To achieve the aim of the ultimate goal of influence macroeconomic, monetary policy would be conducted by adjustment and control intermediate goal like money supply and interest rates. The rapid development of China’s shadow banking has affected the intermediate target of monetary policy and the ultimate goal, thus increased the difficulty of the monetary policy regulation. This paper analyzes the shadow banking credit creation mechanism. Based on this, we studies the influence of shadow banking in monetary policy intermediate target and the ultimate goal.First, we defined the definition of shadow banking and we summarize the research achievements of domestic and foreign scholars about the shadow banking system; second, we summarize the present status of development of China’s shadow banking, and has made the analysis to the rise of reason and rationality; third, Shadow banking credit creation mechanism and the influence of the monetary policy intermediate target and the ultimate goal are analyzed theoretically; forth, using VAR model, we make empirical analysis of the shadow banking’s influence in monetary policy intermediate target and ultimate goal. The results show that the shadow banking will enhance the volatility of the money supply and economic growth promote inflation, increase the difficulty of the regulation of monetary policy. At last, we put forward relevant policy suggestions from two aspects of improvement of the regulatory system and the adjustment of monetary policy, to perfect our country monetary policy system.