Research On The Impact Of China's Shadow Banking System To The Interest Rate Transmission Mechanism Of Monetary Policy

In recent years,with the encouragement of China's financial innovation and the continuous development of the financial market,and under the drive of regulatory arbitrage in the banking system,China's shadow banking system has experienced rapid development,which has brought profound impact on China's monetary policy control.From the perspective of its operational pattern,on the one hand,the creation and transaction of various shadow products have invisiblely increased the actual liquidity of the society,resulting in statistical distortions of China's money supply index.On the other hand,it has enriched social financing channels and strengthened the connections among financial markets,which to a large degree has promoted the market-oriented interest rate reform.In other words,it can be said that the development of shadow banking has played a role in the transformation of China's monetary policy framework from quantitative-based regulation to price-based regulation.At present,the new price-based monetary policy framework in China has been initially established.However,the key to the effectiveness of monetary policy regulation under this new framework depends largely on the efficiency of the interest rate transmission mechanism.The shadow banking products,as an active component of the currency,credit and bond markets,have an impact on the formation of interest rates in these markets,which in turn may affect the interest rate transmission process of monetary policy.Under these facts,it is meaningful to research on the impact of shadow banking system to the interest rate transmission mechanism and efficiency of monetary policy.To explicitly explain the internal mechanism of how the shadow banking system would influence the transmission of monetary policy,it is necessary to first study the development history and business characteristics of shadow banking.By doing so,this paper finds that China's shadow banking business has close capital relation with commercial banks and is more like the "shadow" of commercial banks.On this basis,this paper theoretically and empirically decomposes the research problem into two parts:the internal transmission process and the overall transmission process.In the internal transmission process,this paper incorporates shadow banking and commercial banks into a generalized banking system,and examines how the policy interest rate impact on the general banking system is transmitted between shadow banking and commercial banks.In the part of overall transmission,this paper modifies the classic IS-LM model based on the fact that the development of shadow banking has helped to increase the interest sensitivity of micro-subjects.Finally,in order to verify the viewpoint of the theoretical part of this paper,this paper uses VEC model,VAR model and impulse response function to empirically analyze the impact of shadow banking on monetary policy transmission.Conclusions are drawn that on researh of internal transmission,there is a long-term equilibrium relationship between the deposit and loan interest rates of shadow bank and the deposit and loan interest rates of financial institution.The policy interest rate will affect the deposit and loan interest rates of financial institutions through the shadow bank deposit interest rate,and further affect the shadow bank loan interest rate.On research of overall transmission,the policy interest rate is basically effective in transmitting to the intermediary interest rate while greatly weakend when transmitting to ultimate production due to the reverse effect of shadow banking.