Chinese Shadow Banking Operation Mechanism And The Impact On Financial Stability

Shadow banking,generally speaking,is able to exercise similar to the commercial bank term conversion,liquidity conversion and credit conversion function,but not regulated or less regulated by credit intermediary structure.the shadow bank played a pivotal role in the global expansion and in the subprime mortgage crisis and the debt crisis that have made all circles at home and abroad led to the shadow bank research attention.At this point,academics and industry around the shadow bank risk and supervision made a lot of research.China's shadow banking,as a traditional commercial bank credit supplement,comes from the environment that the long-term financial constraints and a large number of financing needs that can be not met.Due to its lack of supervision and high-risk characteristics,shadow banking in the community can provide liquidity and improve the efficiency of financial market allocation,but also increase the systemic risk and the financial system instability.After 2009,with the explosive growth of China's shadow banking,the risks are gradually emerging,such as the continuous outbreak of various trust default event.There are already rich research about the emergence,mechanism and risk of shadow banks in China.Among them,most of the scholars have analyzed the risk of shadow banks from the angle of shadow bank products.The subprime mortgage crisis showed a strong systemic systemic infection effect,so Basel III emphasizes the importance of focusing on the institutional relevance of financial institutions to prevent systemic risks.At the same time,with the rapid development of China's financial market reform,the arrival of the era of great capital management and the rise of Internet finance,China's financial institutions use a large number of capital management channels and Internet financial platform to carry out extensive cooperation to circumvent supervision,so Financial innovation products emerge in an endless stream,and business model is more complex and mosaic,and institutional relevance has greatly increased.Therefore,how to analyze the operation mechanism behind the shadow bank products and the relationship between the institutions to identify the main source of risk for improving the effectiveness of China's shadow banking regulation is of great significance.This paper discusses the development process and operation mechanism of shadow banking in China,and defines the scope of business and the scope of the organization included in China's shadow banking,and introduces and analyzes the shadow banking business in China.,and summed up the main risk of China's shadow bank.Then,based on the characteristics of China's shadow banking,this paper constructs the theoretical model of the risk of the shadow bank,and discusses the influence of the behavior of China's shadow banking system on financial stability.In this paper,based on the perspective of institutional association,taking into account the dynamic evolution of the shadow banking system,the TVP-VAR model is used to analyze the risk contagion of shadow banking between banks,securities,trusts,insurance and Internet finance at different stages.Finally,the generalized variance decomposition technique is used to construct the directional network model between the shadow banking institutions,and the risk conduction path between the institutions is described,and the system importance of the shadow banking system in different periods is identified.The empirical results show that China's banking,securities,trust,insurance and the internet finance have been in line with the diversification of China's shadow banking system from the single channel of the Bank's letter to the broker channel,insurance channel and the Internet financial channel.There is a significant shadow banking risk transmission effect between finance.In addition,from 2011 to 2015,China's shadow banks of the important institutional institutions at different stages are different.Among them,the commercial banks in has always played an important role in the the development of China's shadow banking and is the main source of risk.Finally,according to the conclusions drawn from the study,this paper puts forward the corresponding regulatory opinions.