Research On The Influence Of Shadow Banking To The Liquidity Of Our Commercial Banks

Safety, Liquidity and Profitability are the main principle of our Commercial Banks. With the deepen of Financial Development Innovation, Profitability is not the single target of our Commercial Banks, the importance of liquidity strengthens in their daily operations. If there is something wrong with the liquidity, for instance, having difficulty in paying the withdraw deposit or debt payments from their customers, Commercial Bank’s reputation will be damaged, thus cause series of problems, even Financial Crisis. It will cause loss to the real economy finally.In recent years, the scale and orientation of Commercial Bnaks’ loan is controlled more and more strictly. In contrast, Shadow Banking has more flexible captical investment orientation as well as higher return, what’s more it is out of the supervision of or less controlled by our Supervisory Authorities, thus driving the fast development of Shadow Banking. It plays its unique and important role in meeting the demand of social financing, especially middle and small-sized enterprises. But our Undeveloped Financial Market, Imperfect Financial System as well as the Diffe-rentiated Regulation Pattern has making the flaw of the Supervision of Shadow Banking. When the Shadow Banking plays its role in Financing, it really grows the risk of Finance System, especially the System of our Commercial Banks. Because it contributes to the Banks’ capital funding dismatch, enhancing the demand of Banks’ current captial, thus reducing the liquidity of Commercil Banks finally.Previously, the study on Commercial Banks’ Liquidity was mostly about Macr-oeconomic Factors and Commercial Banks’ internal factors, such as Non-Performin-g Loan Ratio, Capital Adequacy Ratio and so on. There is no research on the relatio-nship between Shadow Banking and Commercial Banks which makes room for the writing of this paper. In fact, Shadow Banking has various series, as well as its operation pattern. On one hand, we can’t accurately calculate the scale of Shadow Banking. On the other hand, because of the limitation on words, we can’t give comprehensive discussion about all its effects on Commercial Banks’Liquidity. So, in this paper, we choose the representative patterns discussing its effect on Commer- cial Banks’Liquidity.In this paper, we will explore the influence of Shadow Banking to the liquidity of our Commercial Banks in theoretical and empirical level. We divide the paper into five parts to discuss. The first part is about our introduction, introducing paper’s research background, significance, content, method and its innovation and shortage. The second part is main about related theoretical overview, containing the definition, effect factors and influence of Commercial Banks’Liquidity as well as the definition, motivating factors and features of Shadow Banking, classifing the Shadow Banking into Inside Shadow Banking and Outside Shadow Banking. In the third part, we firstly introduce the current situation about the Shadow Banking in our country, secondly, we theoretically discuss the relationship between Shadow Banking and Commercial Banks’Liquidity. In the forth part, we empirically discuss its relationsh-ip, building VAR models using the monthly time series data of 101 months, from January,2006 to March,2015, on basis of which gives advice relatively in the fifth part. This will make us have a more objective awareness of Shadow Banking as well as its development and help our government perfecting our Shadow Banking Supervision System, optimizing our Finance Creation Environment. What’s more, it also has strong practical significance for Commercial Banks in enhancing its profita-bility, reducing operating cost and promoting the reputation of the Bank.After the theoretical analysis and empirical analysis, we come to the conclusion that the rapid development of Shadow Banking in our country really has an effect on the liquidity of our Commercial Banks which contributes to the Banks’ capital fund-ing dismatch, decreasing its average debt deadline, thus enhancing the demand of banks’current captial, reducing the liquidity of Commercil Banks finally.