The Impact Of Shadow Bank Size On The Security Of Commercial Banks

Recently,Chinese shadow banking system has been developing quickly and has become a very important power in financial market.Due to its highly leveraged control,high period mismatch and avoiding authority regulation,shadow banking system is likely to create some default risks.In addition,in China,shadow banking system is highly related to commercial banks in its daily business and therefore is likely to affect the stability of Chinese commercial banks.As we all know,commercial banks hold the main body status in the Chinese financial system,so the instability of commercial banks will definitely cause risks to the whole financial system.Thus,studying the influence of shadow banking system on commercial banks will help us get a forward and clear insight into their relationship,and then provide some new clues and ideas for leading,regulating its development and finally maintaining the stability of Chinese financial system.In this paper,I will analyze the relationship between the scale of shadow banking system and the operating management stability of commercial banks by using qualitative analysis and quantitative analysis method.First,on the basis of relevant foreign and domestic researches and by considering the inherent features of shadow banking,I will analyze the potential risks that shadow banking system brings to commercial banks from a theoretic perspective.Then,I will measure the scale of shadow banking system and the operating management stability according to the relevant data from 2004 to 2017 and adopt the Augmented Dickey-Fuller test,Co-integration test,Granger causality test and least squares regression to further get a precise conclusion on the relationship between them.The conclusion of this paper is that the relative scale of shadow banking system,the consistent index that reflect the current condition of macroeconomics and the operating management stability constitute a long-term balanced relationship.This co-integration relationship is a quadratic function,which shows a threshold effect between these two variables.If the relative scale of shadow banking system is less than 54.11%,then the expansion of its scale will strengthen the operating management stability,but the opposite will weaken this stability.Consequently,everyone should think about their relationship with an analytical view.More exactly,the authority is supposed to support and guide the development of the shadow banks rather than exaggerate their existing risks,thus directing shadow banks to promote the real economy.While at the same time,we should also be aware of the potential risks and establish a powerful regulatory system so as to deal with issues before they happen.For the supervision of the security of commercial banks,we should focus on the capital adequacy ratio of commercial banks,because shadow banks have the greatest impact on the capital adequacy ratio of commercial banks.Therefore,we must establish an effective regulatory system with a core capital adequacy ratio.