An Analysis On Shadow Banking Business And Its Influence To The Liquidity Creation Of Commercial Banks

The shadow Bank of China is dominated by banks,the essence of which is disguised loan and shadow of banks.In recent years,the shadow banking system is developing rapidlly,on the one hand,it can meet the capital demand of the real economy and make up for the market failure;On the other hand,in the case of supervision that can not be followed up systematically,a large amount of financial innovation is carried out in the name of the service entity,elongated arbitrage funds chain,push high leverage.Commercial bank as an important link in he economic development,the liquidity creation of commercial bank plays a vital role,while the short and long liquidity mismatching behaviors of commercial bank constantly creates liquidity,and many associations will bring a systematic impact on the whole system.Study the linkage of the shadow banking business and liquidity creation,it will provide more possibilities for the banking system to improve the management mechanism,improve the financial innovation environment and control of the self risk of the banking system.This paper elaborates the concept of the shadow banking and the liquidity creation.As for shadow banking,this paper introduces development and characteristics,and compare China to foreign shaow banking,then analyses the basic theory and mode of commercial banks to carry out the shadow banking,measures the shadow banking scale;as for liquidity creation,explains the mechanism and influencing factors of liquidity creation,and measures each bank's liquidity creation.Next,it analyzes the influence of the shadow banking business on the liquidity creation of commercial banks from the theoretical level and makes relevant assumptions.In the empirical part,we measure the scale and liquidity creation of 72 banks in China.We use dynamic panel model to return the scale of the shadow banking business to the total liquidity creation,the intra scale liquidity creation and the off balance liquidity creation.This paper draws the following conclusions:(1)the Commercial Bank of the shadow banking promotes liquidity creation,expanding the larger the scale,the more liquidity creation;(2)the shadow banking business inhibits intra liquidity creation,promotes off balance sheet liquidity creation;(3)different types of shadow banking business scale and total bank liquidity creation are positive correlation,it also has positive correlation with the balance sheet liquidity creation.The impact of the size of the shadow banking business on the liquidity of different types of banks is different.The scale of the shadow banking business of the state-owned banks promots the intra liquidity creation.The size of the shadow banking business of the joint-stock banks and the local banks has a negative effect on the intra liquidity creation.According to the final empirical results,combine with theoretical analysis,we give some policy recommendations from three perspectives: banks,relevant regulatory authorities and non banking financial institutions.For banks,the commercial banks should strictly control the scale of shadow banking,make the real implementation of the appropriate scale to create the appropriate liquidity level,pay attention to business innovation,develop the shadow banking business at the same time also should pay attention to traditional business,avoid the shadow banking squeezing intra liquidity creation.All kinds of innovative banking business should cooperate with traditional businesses in competition.For the regulatory authorities,the heterogeneity of banks should be fully taken care of,and banks should be regulated differently.At the same time,we should treat the development of shadow banking dialectically,confirm its role in economic development,and correctly guide,we should also attach importance to its negative effects,and strictly control the risk of liquidity.For non bank financial institutions,in the process of providing financing channels,we should have overall control over the risk of the whole system,avoid the fact that the funds are not real and enter the void,push up the financial leverage ratio.