The Research Of Risk And Regulation On The China’s Shadow Banking

The term ’Shadow Banks’, which generally means non-bank institutions that provide traditional banking services, has become well-known since the Financial Crisis in 2008. Affected by the consistent financial repression in China, local shadow banks has a relative shorter history while the developing speed is fierce. Especially within the recent two years, the burst of P2P service has attracted more attentions to the shadow banking.The research on shadow banking in China is still in the beginning stage. This article analyses the shadow banking from various angles, aiming to provide some references for the researchers and regulators. First, it gives an overview of shadowing banking researches, both from China and abroad. The paper categorizes China’s shadow banking system, analyses the causes and discusses its micro and macro influences based on the special characteristics of China’s shadow banks. Then the paper estimates the scale of China’s shadow banks and illustrates the impact of the factors such as product vitality, quantity, term, and similar-product interest rate on the scale, using the data from P2P financial industry as an example. These estimations shall be used to provide further references for the researchers and regulators. The last parts discuss the current statuses of the shadow bank regulation in China and globally. Comments and opinions on the corresponding China’s regulatory policies are proposed and suggestions for the investors who are interested in the related products are given.Shadow banks has pros and cons, it shall not be allowed to develop without regulation nor completely forbidden. Guidance must be applied to ensure regulation, standardization and less ’shadow’, so that shadow banking can have more positive influences on the stabilization of China’s financial market and enhance the creativity of financial products.