The Research On The Liquidity Risk Aversion Of Shadow Banking

The 2008 financial crisis is result from the failures of Shadow banking. As a result of the consumption and investment effect is not obvious, the European Union economic recession caused China’s economy into the "new normal" era. Shadow banking as a local government investment and financing platform, the local government faces problem which should be solved, such as insolvency, clean up the stock of debt and dissolve the local government debt risk.Trust company is another important part of the shadow banking system. Chinese trust industry size and growth rate from 2007 to the present rapid expansion, making it in to get a lot of money, while revenue increased social responsibility to bear, all risks are increasingly apparent. Although the CBRC to the trust net capital management industry, but relative to asset size of several trillion annual growth, the trust excessive leverage, liquidity risk and systemic risk one will get out of hand, but the outbreak of the industry, financial system and society will have a tremendous impact. In view of this, the researchers shadow banking liquidity risk aversion has a strong practical significance.Basing on the present situation and major problems faced by the shadow banking system of China, this paper summarizes the definition and characteristics of shadow banking, the current problems exists in China under the regulatory system and its liquidity risk problem. In the view of financial fragility and risk spillover theory, this paper from the perspective of macro and micro views to study the risk influence mechanism of shadow banking. And in the view of the trust enterprise micro data, this paper analyzes the size of the shadow banking, rights and interests, and the selling product’s fluctuation characteristics and its trend. Last but not the least, this paper based on the dynamic response mechanism model, theoretic and empirical study the financial repression, currency regulation’s detail effect to shadow banking risk.Specifically, the way such as adverse selection and moral hazard, leads to the shadow banking operation risk, liquidity risk and term mismatch risk, owing to information asymmetry, which determines the shadow banking system vulnerability. Shadow banking fragility of mainly comes from the real economy and virtual economy as well as the imbalance between the managers’ professional knowledge is insufficient demand for specialized knowledge demand in financial derivatives. The interests "kidnap" regulation model and its lag effect, causes the principle of prudent supervision in China is invalid. The above factors is the root of shadow Banks liquidity risk.In terms of the shadow banking liquidity risk econometric, this paper theoretical and empirical analysis of macro and micro factors on the shadow banking liquidity risk economic effect, based on dynamic response mechanism model. The empirical results show that, the rate of economic growth and inflation are significant affect the risk of shadow banking liquidity while currency regulation have inhibitory effect on the shadow banking liquidity risk. In terms of influence degree, currency regulation’s effect is slightly lower than the sum of economic growth and inflation, but higher than that of the economic growth and inflation separate effects respectively. In terms of microcosmic variable, shadow banking liquidity risk owns inertia characteristics, in the long term, due to self-transfer effect, the shadow banking liquidity risk owns about four times expand. Financial repression, non-performing loan ratio are significantly increased the shadow banking liquidity risk, but enterprise management risk preference has an opposite effect.In terms of policy recommendations, the present study suggests that banks need to focus on improving the shadow of its own capital adequacy ratio; strengthen internal controls, improve the information disclosure system; to build a macro-prudential risk monitoring system and strengthening supervision of liquidity risks afterwards four aspects liquidity risk prevention and avoidance.