Research Legal Issues Shadow Banking Supervision

Shadow banking refers to credit or no state support and guarantees provided by thecentral bank, to rely on financial innovation, financial entities and business free fromoutside the regulatory system. In capitalist countries, the shadow banking started earlier,the type of its business is extremely rich, and huge. Asset securitization is currently onthe international community to the shadow banking most common business model. Incontrast, China’s shadow banks will have to start much later, early in the actual shadowbanking business simply to serve as a substitute for the role of traditional bankingbusiness scope is generally limited to the coverage of traditional financial entities inareas and fields. In recent years, as China’s economy continues to slump, the country’seconomic policy began to require the financial sector to play its flexibility and servicecapabilities. Under favorable policies and financial network environment rise, China’sshadow banks began to show great market potential for the economic recovery hasinjected a needle "tonic." However, because of the relatively backward shadow bankingbusiness model, as well as excessive leverage, low degree of transparency ofinformation, lack of liquidity and other issues. Our shadow banking booming at thesame time also contains a huge risk, if uncontrolled, its destructive power no meansconfined to the financial sector, and even lead to the outbreak of systemic risk. After thefinancial crisis in2008, the shadow banking world is generally considered one of theimportant cause of the crisis, the shadow banking system and establish effectivesupervision is the consensus reached by the current countries in the world.For now, China’s shadow banking supervision laws and regulations are not perfect,the regulatory body is not yet clear, regulatory targets vague regulatory philosophybehind the lack of relevant supporting systems, which are our country for effectivesupervision of the shadow banking Problems. The shadow banks included in the scopeof the regulation, and not blindly take pressure attitude. Effective regulatory system isnecessary to maintain the security and stability of China’s financial markets, but alsogive full play to the characteristics of the shadow banking flexibility, so that in the premise of risk control and better serve the real economy. This requires that China mustimprove the relevant laws and regulations as soon as possible, will be included underthe supervision of the shadow banking regulation.The study first the concept and content of the shadow banking was definedfunction describes the shadow banking system. On this basis, in view of the shadowbanking development, motivation and risk analysis, and to find the existing problemsfrom a legal and regulatory point of view, and with the United States, Britain, theEuropean Union and Japan and other countries and regions in the post-crisis era shadowregulatory practices of the banking system, for the lack of supervision of the shadowbanking situation, put forward a clear regulatory body, enhance regulatory philosophy,improve the regulatory and legal mechanisms to strengthen coordination regulationproposal.