Research On The Effect Of Chinese Shadow Banking System To The Financial Stability Based On The Macro-prudential Perspective

In August 2007,the sudden outbreak of the subprime mortgage crisis in the United States caused great turbulence and collapse in the financial markets of the United States and Europe,leading to a global financial crisis.As a major cause of the global financial crisis,Many scholars from abroad has focused more on the research of shadow banking.As a parallel social financing channel with traditional commercial banks,shadow banking make up for the inadequacies of traditional commercial banks and improve the entire social financing system comprehensively.However,shadow banking has intrinsic properties such as opaque information and high leverage.If not be effectively supervised,it will easily bring about greater risks and lead to instability in the financial system.This paper refers to the literature on shadow banking at home and abroad.Firstly,the paper defines the shadow banking,and summarizes the causes and characteristic of shadow banking in China.Then it uses the indirect measurement method to measure the size of China's shadow banking from 1992 to 2016.The size of China's shadow banking grew rapidly from 0.54 trillion in 1992 to 57.54 trillion in 2016.It has grown by 105.56 times over the past 25 years,with an average annual compound growth rate of 21.47%,which is almost an exponential growth trend.Then,a financial stability index measurement system consisting of macroeconomics,commercial banks,financial markets,and foreign trade was constructed and the financial stability index from 1992 to 2016 was calculated by using the financial stability index method.Then we analyze the shadow banking's influence on financial stability from both positive and negative aspects.The positive effects of shadow banking include: making up for the deficiencies of traditional commercial banks,broadening credit creation channels to enhance market liquidity,and promoting the process of interest rate marketization.Negative effects include increasing the systematic risk of commercial banks,weakening the effectiveness of monetary policies,and increasing the systemic risks of the financial system.On the basis of theoretical analysis,a VAR model of shadow banking and financial stability was established.Through the empirical approach,we can analyze the impact of shadow banking on China's financial stability.Finally,combining theoretical basis and empirical results,it is found that in the early stage of the emergence of shadow banking,shadow banking can meet the financing needs of fund demanders and the investment needs of residents,.It could ease the pressure of funding shortages and increase the liquidity of funds in the entire financial market.In the later period,due to the increase in the default rate,risk exposure has occurred.It shows that the shadow banking's negative impact on financial stability has a certain degree of concealment and time lag.Finally,we propose policy recommendations that are in line with China's national conditions from the aspects of monitoring and supervision of shadow banking from the perspective of macro-prudential.On the one hand,we can establish a standardized statistical system for shadow banking and related information disclosure systems.On the other hand,we will build cross-industry supervision,counter-cyclical supervision,and dynamic supervision system for shadow banking.Under the macro framework of macro-prudential supervision,we will standardize the development of shadow banking and guide it to better serve the real economy to ensure the stability of China's financial system as a prerequisite.