A Study Of The Impact On Interest Rate Marketization To The Risk Of System Importance Banks

With the deepening reform of interest rate marketization,the cost of indirect financing from formal channels increase gradually,leading to the rapid growth of shadow banking industry in recent years.In 2015,the scale of Chinese shadow banking industry has reached 53 trillion yuan,with nearly 30%increase compared to last year.Different from the shadow banking industry in western countries which mainly operate asset securitization products,the shadow banking businesses in Chinese system importance banks are mainly financial business,entrusted loan business,interbank lending business.Although it's the inevitable result of Chinese system importance banks take part in the shadow banking business during Chinese interest rate marketization reform,the interest rate marketization reform led to the interest rate term structure more complex,then the yield rate of shadow banking products become more uncertain,thereby increased credit risk and liquidity risk of the system importance banks.Moreover,enhance the non-performing risk and bankrupt risk of the system importance banks.Therefore,In order to reduce the probability of risk occurrence in Chinese commercial banks and to maintain the stable development of China's banking industry,it is necessary to clarifying the relationship among the degree of interest rate marketization,the scale of shadow banking business and the risks of the system importance banks.This paper reviews and summarizes the domestic and foreign literatures on interest rate marketization with bank risks,the connotation of shadow banking and shadow banking business with financial risk,pointing out that the existing research blank at first.Then analyzes the main risks of the system importance banks,reviews the theoretical basis of the interest rate marketization and the development of the shadow banking business.Thirdly,according to the index system established by the CBRC determine the Chinese system importance banks,and to define shadow banking business in China following by the State Council documents.Finally,based on the quarterly data of 13 Chinese system importance banks from 2006 to 2015,using Random effect and OLS regression methods analyses the relationship among interest rate marketization,the scale of shadow banking business and bank risks.This paper argues that with the degree of interest rate marketization get deeper,the level of bank risks in China get higher,and the larger scale of shadow banking business of system importance banks is the main way of risk transmission.Based on the conclusion,the paper puts forward three policy suggestions:strengthen the supervision of the shadow banking business operating by system importance banks',the system importance banks regulate their shadow banking business,and to encourage system importance banks develop asset securitization business moderately.