Effects Of Shadow Banking On Economics Development Under Multiple Perspectives

The global financial crisis broke out at the end of year2007, which brought "shadow banks" emerging from the water, which received widely attention from then on. But In what ways should shadow banking affect underling commercial banking system? Is it positive or negative? What’s the finally impact on the social economic development of shadow banking? With these questions, this paper first reviewed the research progress both at home and abroad, and the characteristics of the field. Then employing related research methods, we estimated the data of China’s shadow bank on the basis of the definition of the special shadow banking system. In the following part we carried on the empirical test of macro-and micro-economic effect of China’s shadow banking development with VAR and Panel regression. There are at least three conclusions. Firstly, the scale of China’s shadow banking shows an increasing trend since1992, with the increasing rate of23.08%year by year; and folk lending credit accounts for more than half of total scale of China’s shadow banking. Secondly, in terms of macro-economic effect, the development of the shadow banking has played a positive role in promoting economic development in China, but the late negative effects cannot be ignored; the shadow banking expansion will cause negative impact to the money supply. Thirdly, in micro-economic effect, shadow banking helps commercial banks improve profitability; however the impact of shadow banking on commercial banks’risk is uncertain. Therefore, we should actively guide development of the shadow banking and strengthen the unified supervision, rather than preventing and killing it. In addition, the government should deepen the reform of the interest rate marketization, thus weakening the motivation to shadow banking risk from the source.