The Empirical Research Of Shadow Banking Impaction Money Supply In China

Since the US Subprime Mortgage Crisis triggered the global financial crisis in2007, the shadowbanking system has attracted great attention. Shadow banking was first put forward by Paul McCulley whowas served in the Pacific investment management company, USA for the first time, which refers tononbanking concerns (free from the banking system, involved in this kind of traditional banking). However,the concept of Shadow Banks was put forward in the early1970s, with the emergence of the securitizationof housing mortgage loan, and then continuously developed into an important component of modernfinancial system. In recent years, the shadow banking system has rapidly developed in our country.According to official data by the end of2012(using the narrowest diameter to collect), the scale of theshadow banking in China has reached14.6trillion yuan, accounting for11%of total banking assets inChina. The rapid development of the shadow banking system would, on one hand, have a promoting effecton the real economy, and is beneficial to alleviate the current our country small and medium-sizedenterprise financing difficult problem; On the other hand, shadow Banks use their credit creation functionto increase the supply of credit, expand the money supply in actual, give a shock to the intermediary targetof the money supply in our country, and affect the effects of monetary policy.This article is based on the concept, characteristics, origin and running mechanism of the shadowbanking of China to analyze the shadow banking’s impact on money supply intermediary goal in detail. Thetheoretical analysis shows that the shadow banking for measurability, controllability of money supply andrelevance has weakened the utility. In empirical aspect, with the application of relevant research methods ofeconometrics, the author select representative variables and the latest data, and choose the vectorautoregressive (VAR) model to analyze the dynamic relationship between shadow banking developmentand the money supply. The empirical design of the main measurement methods are: unit root test,co-integration test, error correction model, impulse response function (IRF) and variance decomposition,etc. The analysis results show that the long-existence and stability of co-integration relationship betweenthe money supply and the shadow banking. In addition, the development of shadow banking will influencethe money supply with a certain lag. The empirical results and the theoretical analysis are almost the same. Finally, combined with the current actual situation in our country, the author put forward three suggestionsto perfect the monetary policy intermediary target of our country:1, continue to use the money supplyintermediary goal;2, focus on the social finance indicators;3, Interest rate reform to accelerate theweakening of monetary aggregates fluctuations.