Research On The Impact Of Shadow Banking On Financial Stability In China

After years of rapid development,shadow banking has changed the global financial structure.Although China's shadow banking is still in the initial stage of development,it has become an important part of China's financial system.In addition,although the form of shadow banking in China is relatively simple compared to developed countries,the development is not as normative as developed countries.So there is still a greater risk.In recent years,the discussion on the impact of the rapid development of shadow banking in China has gradually increased.In order to study the influence of shadow banking on financial stability,this paper adopts the method of combining theoretical analysis and empirical analysis.Besides,this paper also uses the relevant statistical data and charts to support the viewpoints.First,this paper defines narrow shadow banking and generalized shadow banking respectively,according to the characteristics of shadow banking in China and research results of relevant scholars.Second,this paper analyzes the influence of shadow banking on monetary policy through the establishment of SVAR model of monetary policy,using set index and related data from 2002 to 2015.Then,discuss the influence of generalized shadow banking on China's financial stability,by establishing GARCH partial t distribution Var model and using related data from 2007 to 2016.The empirical result shows that the expansion of China's shadow banking enhances the effectiveness of open market operations,making monetary policy which is based on money supply as the observation target is difficult to achieve the desired regulatory effect.Furthermore,the overall risk of China's shadow banking is high.The highest risk among them is the securities industry,followed by the trust industry and the folk lending industry at last.Based on the empirical results,this paper points out that the regulatory authorities should be cautious about the development of shadow banking.We can neither allow the barbaric development of the shadow banking,nor blindly limit their expansion.The regulatory authorities should combine the regulation of shadow banking with the reform of China's financial system.