Research On Legal Issues Of Regulating The Shadow Banking

After financial crisis, governments begin to pay attention to its evil backstagetrigger–the shadow banking. Shadow banking can easily trigger systematic financialcrisis, while the absence of supervision has been considered as the most importantreason. Shadow banking, which still undeveloped in china yet has a staggering growthrate. China Finance Supervision Report(2014),published by Financial Department ofChina Academy of Social Sciences,points that shadow banking system has about27000000millions, nearly19%of overall assets of banking system. However, shadowbanking operate fragility, with too many problems like liquidity shortage,unprofessional standards, inadequate disclosure of information, bad management,regulatory arbitrage, vague legal status, inconsistent regulatory standards, and periodmismatch between the source and funds. But in china, the regulation of shadowbanking is not fully in its place, or even totally absent, which really ignoring shadowbanking’s importance of banking system and its substantial risk.This essay shows us the basic knowledge of shadow banking like its source,conception, forms, and legal risks. After analyzing china’s shadow banking problemsfrom the absence of legal regulation, lagging regulation system, to inadequateinternational cooperation, referring to other countries and international organizations’regulation system, this essay tailor a legal regulation mode of shadow banking systemto China, and put up several proposals to improve the old regulation system, which willsystematically defend shadow banking risks and finally conform to the internationallegal regulation system trend.