A Research On The Effcet Of Shadow Banking Expansion On Commercial Bank In China

The term of "shadow banking" is widely known to us because of the outbreak of global financial crisis from2007to2009, which was raised by McCulley, the executive director of American Pacific Investment Management Company. As a financial innovation, Shadow banking has a rapid development in China, and became an important sector of China’s financial system particularly in recent years. But there is no consensus on the conception of shadow banking. Based on the discussion of the conception at home and abroad, the first research of the essay is to summarizes the characteristics of China’s shadow banking system and estimates the degree of expansion of the scale of China’s shadow banking. Opaque, highly leveraged and unregulated are the characteristics of shadow banking. So its expansion will must threaten commercial banks. This paper studies the path of impact of the shadow banking to commercial banks, to research whether the expansion of the scale of the shadow banking is appropriate.From the study, we find that there is Indeed a positive correlation between the degree of expansion of the scale of China’s shadow banking and the instability of commercial banks. On the other hand, the shadow banking can force commercial banks to adapt their business models.According to the above conclusion, the paper believes that it’s necessary to promote the reform of the commercial banks and to guide banks’ internal shadow business adjustment. At the present stage, we should release the scale of shadow banking appropriately, and pay attention to the transformation of shadow banking business model. On this basis, we must strengthen the supervision to regulate financial markets.