Research On The Influence Of Shadow Banking On The Stability Of Financial System

The shadow banking has played an important role in promoting the outbreak of the financial crisis in 2008.Through the operation mechanism of asset securitization,shadow banks issued highly leveraged,structured,derivative products,and the rapid expansion of scale has penetrated the entire financial market.However,it is not strictly regulated by the market.Once a partial systemic risk is formed,the risk is bound to spread to the entire financial system.At present,the operation mechanism of shadow banking in China is different from that of foreign markets,it depends on commercial banks.The motivation of commercial banks to go out of tables makes them form the chain of credit intermediaries.Commercial banks have gradually expanded the scale of China's shadow banking by implementing bank-trust cooperation,bank-securities cooperation,and bank-securities-trust cooperation,using various types of wealth management products,undiscounted acceptance bills,entrusted loans,and inter-bank business forms.How to use the shadow banks,the"double-edged sword",is the difficulty of supervision.For commercial banks,they can complement each other with traditional banks and compete with traditional banks,making the traditional bank's innovation and competitiveness strengthened.For the entire financial system,it helps the market to run more efficiently,but it also has an excessive credit expansion,which affects the stability of our financial system.This article discusses the impact of shadow banking on China's financial system from a qualitative and quantitative perspective.At the same time,as an important financial medium for China's financial system,the stability of commercial banks can reflect the stability of our financial system to some extent.Therefore,this article studies the risk spillover effect of the development of the shadow banking system on China's commercial banking system,and further explores the impact of the development of shadow banking on China's financial stability.This article first summarizes the definition,characteristics and causes of shadow banking.Secondly,it analyzes the current situation and the background of the development of shadow banking in China,and briefly introduces the development of the global shadow banking system,and compares the differences between Chinese and American shadow banks.Thirdly,it analyzes the influence of shadow banking on the stability of financial system from qualitative and quantitative perspectives.Then,this paper takes the banking system as an example,which is dominant player in the financial system,and further analyzes the risk spillover effect of shadow banking of commercial banks.Finally,this paper summarizes and analyzes the qualitative and quantitative research of this article,and proposes corresponding policy recommendations.This paper measures the scale of shadow banking and constructs a financial stability index,and then conducts empirical research on the relationship between them.In the measure of the size of the shadow bank,the two main methods of the existing literature are integrated.So,the statistical caliber of the shadow bank is considered more comprehensively.The results show that the size of China's shadow banking is approaching the threshold.Therefore,it is necessary to strictly control its size.Then,the GARCH-t-Copula-CoVaR composite model is used to measure the risk spillover effect.We use the GARCH-t model to fit the marginal distribution of Copula function,and use t-Copula model to measure the CoVaR index.From the risk spillover effect of different types of shadow banks,the spillover effect is most obvious in the trust industry,followed by the securities industry and then the other financial institutions.From the perspective of risk spillover of different types of commercial banks,the shadow banking system has the highest spillover risk for joint-stock banks,followed by city commercial banks and state-owned banks.