Shadow Banking System And Its Impact On The Stability Of Commercial Banks

Just a few years after the outbreak of the financial crisis, the-scale of China’s shadow banking is more and more big, causing the extensive concern of scholars and regulators. There are countless ties between commercial banks and the shadow banking system. Shadow banking system had a great impact on the stability of commercial banks irr China, including both positive and negative side. Therefore, in-depth study of the relationship between the shadow banking system and banking stability and to reduce the impact of shadow banking in the financial system has important significance.Based on the analysis of theory, we collect the data from1987to2013, use empirical methods to study the effect of the shadow banking to the stability of commercial banks. First, based on the relationship between shadow banks and commercial banks, we divide the shadow banking into three categories:the shadow banking within the banking system and the shadow banking outside the banking system, the shadow banking combine internal banks and external banks, then select products, not observed credit, the trust assets and the entrusted loans as the typical representative of three kinds of shadow banking, And calculate the three parts scales respectively then sum them as the overall size of the shadow banking in China, then select the "shadow banking absolute size/GDP" as the relative size of shadow banking. Secondly, using the comprehensive index method, select three index:non-government loans, bank deposits and bank net assets abroad as leading indicators to build IBSS index to measure the stability of commercial banking system, in constructing IBSS index, this paper adopted the enactment right weight variation coefficient method, a good way to avoid person’s subjective factors deviation, make the results more objective. Then we see the bank stability index IBSS as the dependent variable, macroeconomic indicators as independent variables, build the regression equation between them, use Forward Wald stepwise method to select variables into the regression equation, the results show that M2growth rate and the growth rate of fixed assets are through the variables significant test and enter the regression equation. Finally, we see IBSS as the dependent variable, the relative size of the shadow banking and the square of the relative size of shadow banking as independent variables, M2growth rate and the growth rate of fixed assets as control variables, build the establishment of non-linear regression equation between them.The conclusion of this paper is the effect of the relative size of the shadow banking on the stability of the commercial bank is nonlinear. The relation between commercial bank stability and the relative size of the shadow banking is negative, and the relation between commercial bank stability and the square of the relative size of shadow banking is positive, they have "U" type valve value relationship. This threshold is54.02%, that is, when the size of the shadow banking is less than54.02%, with the expansion of the relative size of the shadow banking, the stability of commercial banking system is enhance; When the relative size of the shadow banking is more than54.02%, and the expand of its size will decline the stability of the commercial banking system. In conclusion, the effect of the scale of shadow banking on bank stability in oub country is not a simple promote and block, it has two sides, if the shadow banking size controlled within a certain range, it is advantageous to the stability of commercial banks, but when it bigger than the critical value, the negative influence on the stability of the commercial banks appears.According to the above conclusion, the paper propose a variety of measures including guide the moderate development of shadow bankings build prudential regulatory framework to accelerate the process of market interest rates and sound financial laws and regulations to guide the standardization and sunshine development of shadow banking, hereby reducing the negative impact of the shadow banking on the stability of commercial banks.