A Comparative Study On The Impact Of Shadow Banking On Chinese Listed Bank Liquidity Risk

Since the US financial crisis in 2008, we began to be familiar with the concept of shadow banking. Largely, it was the shadow banking system which aggravated the outbreak of the financial crisis, and the risk further spread across the globe. In recent years, with the continuous development of financial innovation, the shadow banking has become a significant force of financial, made up financing channels in the market, and played a positive role in national economy. But it does not belong to the traditional banking financial institutions, and there is no regulatory constraint rules. In addition, the shadow banking system has a close relationship with commercial bank system:Firstly, most of the shadow banking business development relies on cooperation with commercial banks; Secondly, the development of shadow banking has urged changes in the operation model of commercial banks, and improved financial innovation level and profitability. Therefore, with quick growth of shadow banking scales, once risks outbreak, it is bound to have an impact on commercial banks. In June 2013, China interbank market interest rates soared rapidly, on 20 June, the overnight interbank lending rate surged 578.4 basis points, lending rate was 13.444%, and the highest overnight bank repo rate reached 30%. For the outbreak of "money shortage", the absence of shadow banking supervision undoubtedly played a role in adding fuel to the fire. We should see American subprime mortgage crisis as a warning to recognize the advantages and disadvantages of the shadow banking, and prevent risks caused by blind expansion of shadow banking.To begin with, the shadow banking was expounded by four aspects:First, introduce and compare on China and foreign concept of shadow banking; Second, analysis on characteristics of shadow banking; Three, comparison on China and American shadow development banking; Fourth, comparison on China and America shadow banking supervision. Then, it elaborated the concept of commercial bank liquidity and risks of commercial bank liquidity respectively. It is the theoretical basis of later contact between the two.Then, this paper analyzed the impact of the shadow banking on liquidity risks of commercial banks. First the causes of Chinese shadow banking were summarized; next the development of Chinese shadow banking and operation pattern were analyzed, and the relationship between China shadow banking and commercial banks and possible liquidity risks were profoundly analyzed; then the mechanism how shadow banking impact on commercial banks was analyzed; finally the possible harmful results caused by blind development of shadow banking were elaborated.In this paper the key chapter, namely the fourth chapter, adopted quantitative analysis and stress test to measure the impact of shadow banking on different types of commercial bank liquidity risk. The stress test model were built up after the scales of shadow banking were measured, and commercial bank liquidity risk indicators are selected; then scenarios are selected through quantitative analysis; and finally it concluded stress reactions of three different types of commercial banks-state-owned commercial banks, joint-stock commercial banks, city commercial banks under the scale expansion of shadow banking. For state-owned commercial banks, when the absolute scale of the shadow banking is up around 40%, and the relative scale of is up to about 16%, it is the critical stress point of shadow banking expansion for state-owned commercial bank. For joint-stock commercial banks, due to the flexible mechanisms, they can quickly inter-bank lend from the financial market according to market fast changes in real time to ease the liquidity risk, and make a rapid response, so the impact of shadow banking expansion is difficult to measure. Nevertheless shadow banking expansion has a strong impact on local city commercial banks.Finally, the text generalized the conclusion of the whole article, and offered some feasible suggestions towards existent regulatory of blind expansion issues of shadow banking. The article pointed out that shadow banking development should be guided, and appropriate development of shadow banking has a positive effect on the development of financial system; for different types of commercial banks, the commercial banks need to improve their construction of liquidity; in order to prevent the shadow banking risks transfer to the traditional commercial bank, the need to establish traditional banking and shadow banking business association fence; finally, in order to actively improve the regulatory agency of regulatory responsibilities and measurement system, the need to establish effectively supervised in accordance with 3 aspects-a unified regulatory agency, expanding scope of the inspection, a regulatory measure index, three aspects of effective supervision Chinese-style shadow banking risks.