The Impact Of The Shadow Banking System On The Effectiveness Of China's Monetary Policy

Our country's shadow banking has developed with rapid growing scale and great attention in academic and practice circles since the 2008 financial crisis.Its development will inevitably affect the development of China's monetary policy.What's the effect on monetary policy,and through which mechanism,and how to deal with these effects are the problems of this paper to research.Based on the theoretical and empirical analysis,this paper discusses the influence of shadow banking on the monetary policy in China.Firstly,introduces the definition,present situation and statistical caliber,also the main components and measurement methods of shadow banking of china;secondly,the effect of monetary policy is defined and the time effect of shadow banking on monetary policy is qualitative analyzed,then learns the shadow banking liquidity creation through the asset securitization credit creation mode,and extends it to the monetary multiplier level to show that the effect of shadow banking credit creation on the intermediate target of monetary policy-money supply,finally concludes the shadow banking credit creation can eventually affect the total output by evaluating the credit channel of monetary policy,means shadow banking can also impact the quantitative effect of monetary policy,in order to complete the whole theoretical analysis.The fifth part is the empirical analysis,by selecting the 1990-2014 China M2,CPI,GDP and the size of the shadow banking data as the research sample,and empirically by applying MS-VAR model.The results show that: shadow banking will enlarge the effect of loose monetary policy,interfere with the effect of tightening monetary policy,and the latter one is more significant.According to the research conclusion,this paper puts forward the corresponding policy recommendations about the shadow banking supervision and perfection of the monetary policy system.