Research On The Impact Of Shadow Banking Scale On The Profitability And Risk-taking Ability Of Commercial Banks

After the global financial crisis,the concept of shadow banking surfaced.In recent years,competition in the market has become increasingly heated,and the liberalization of the financial sector has become more and more trendy.Such market trends as innovation continue to lead commercial banks to become more and more complex and make their challenges more and more difficult.The commercial bank's own business expansion is subject to a number of regulatory indicators such as credit limit,capital adequacy ratio and loan-to-deposit ratio.The traditional expansion mode for commercial banks to obtain high profits through expansion of their own size is affected Great limit.Under such circumstances,the shadow banking business has been widely developed in commercial banks.The existence of shadow banking has its positive effect: while commercial banks continue to transfer assets from the table to the outside of the table to evade regulation effectively,it also provides the possibility of leverage and term conversion for financing activities,and to some extent,expands the bank's profit channel,Which increased the income of commercial banks and satisfied the diversified needs of customers,playing an active role in the bank's profits.However,these shadow banking operations have shifted the traditional on-balance-sheet assets to off-balance-sheet,with the nature of regulatory arbitrage,posing a huge potential risk to the operation of banks and increasing the difficulty of government macro-control.With the continuous accumulation of financial risks,shadow banking operations have shaken the stability of the entire banking system.Therefore,there is an urgent need to strengthen regulation and supervision of shadow banking business.This paper is aim to study the impact of commercial banks' shadow banking operations on their profitability and bearing capacity.Select ROA and Z-Score to measure the profitability and risk bearing capacity of commercial banks.At the same time,select the shadow banking business bank size as the independent variable.Taking the data of 50 representative banks from the decade of 2007-2016 as a sample,build relevant models and use Stata software for empirical analysis,and draw the following conclusions: First,there is a non-linear inverse U relationship between the scale of shadow banking and the profitability of commercial banks.At the same time,the results of grouped regression show that small and medium-sized commercial banks can significantly improve their profitability by engaging in shadow banking;Second,the commercial banks engaged in shadow banking business will be significant increase their risk,and small and medium-sized commercial banks engaged in shadow banking business will increase their risks more.Finally,we put forward our opinions and suggestions on China's shadow banking supervision and risk prevention.