A Research About The Influence Of Shadow Banking On Market Interest Rate And Profit Of Commercial Bank

As one of the important products of financial innovation,shadow banking has developed and expanded rapidly in recent years,which has become an important force in China's financial system.China's shadow banking is not only a substitute for traditional commercial bank credit shortage,but also a market choice for real economy in financial restraint environment.Shadow banking,to a certain extent,make up for China's economic development financing difficulties,and their increasingly larger scales bring profound changes to China's financial environment and system,which make an important difference on China's financial market.This paper divides the shadow banking of China into two kinds:the shadow banking within the system that focus on the off-balance-sheet business of commercial banks,and the shadow banking outside the system which are dominated by civil financial business of commercial banks,based on regulatory and business perspectives.It also analyzes the influence mechanism of shadow banking on the market interest rate and the profit of commercial banks.The innovation of shadow banking in financial products has enriched our country's investment channel.The innovation in pricing mechanism has broadened the financing channel of our country and promoted the interest rate marketization of China.The shadow banking have a double effect on the profit of commercial banks.On the one hand,it creates conditions for commercial banks to obtain regulatory arbitrage.On the other hand,it will lead to the loss of commercial banks' savings and customer resources.In this paper,through the construction of binary financial structure linear model,it is found that the shadow banking will have an indirect impact on the commercial bank benefits through the interest rate transmission mechanism.In the empirical study,this paper uses the quarterly data from 2005 to 2015 to measure the size of shadow banking within and outside the system respectively.The quarterly reports of 16 listed banks are collected by calculation of the commercial bank's efficiency index.The interbank lending interest rate is selected as a index for the market interest rate.By constructing SVAR model,this paper analyzes the influence of shadow banking and different types of shadow banking on the market interest rate and profit of commercial banks.The results show that the development of shadow banking in China has an important impact on the improvement of the market interest rate and the profit of commercial banks.And the shadow banking outside the system are more in line with China's monetary capital market supply and demand in the pricing mechanism,and thus have greater impacts on market interest rate.Plus,different types of shadow banking have different effects on the efficiency of commercial banks.The development of shadow banks within the system is beneficial to the improvement of commercial banks,while the development of the shadow banks outside the system has a negative impact on the commercial banks.The promotion of interest rate marketization will bring a certain impact on the profitability of profit of commercial banks,this suggests that the shadow banking can indirectly through interest rates affect profit of commercial bank.Based on the theoretical and empirical analysis,the paper puts forward some suggestions.First,it is necessary to treat the shadow banking problem correctly.To encourage the shadow banking to innovate and construct a more reasonable financial environment and structure.Second,accelerate the reform of interest rate marketization and improve China's capital allocation efficiency to relieve the contradiction between supply and demand of funds.The third is to encourage commercial banks to transform,expand the intermediary business and off-balance sheet business in order to enhance the comprehensive operational capacity of commercial banks.