Study On The Influence Of Shadow Banking On The Monetary Policy Objectives

The financial crisis in 2008 involved the concept of shadow banking.Foreign shadow banking is a financial innovation that is parallel to the banking system and centered on secularization,but China ' s shadow banking is more of a regulatory arbitrage that mainly depends on banks and meets the demand for credit.The central government has put forward to promote transformation of economic structure by solving excess capacity,digesting real estate inventory,reducing the costs of enterprises,improving managing local government debts.The national financial work conference in 2017 has further pointed out that finance was supposed to support the real economy,preventing and controlling the systemic risks,deepening reform of financial system would be the focus of the financial work in the future.Although shadow banks have positive effects of increasing investment tools and financing methods,solving financing problems of small and medium-sized enterprises,accelerating the process of interest rate liberation,shadow banks produce bad influences of investing the real state,local government financing platforms,high polluting and energy consuming enterprises and excessive enterprises,hollowing out the real economy by pursuing profits in virtual economy,accumulating liquidity risks and systematic risks.As monetary policies are important methods for monetary authorities to regulate macro economy,the credit creation function of shadow banks can interfere with the effectiveness of monetary intermediate objectives by increasing endogenous money supply,and further affect the achievement of monetary ultimate objectives by distorting the transmission of monetary policies.Therefore,it is particularly important to clarify the specific impact of shadow banks on monetary policy objectives at the request of present financial key work,put forward relevant regulatory suggestions to shadow banks and measures to optimize monetary policy.In the background mentioned above,this paper firstly gave the definition of shadow banking in our country by reviewing relevant literature,used for reference classical theories of financial intermediary,regulatory arbitrage,financial developmentto elaborate on the theoretical basis of domestic shadow banking existence.Secondly,based on the credit creation mechanism of shadow banking,this paper theoretically analyzed the specific impact of shadow banking on monetary policy objectives:shadow banking would interfere with statistical accuracy of money supply,weaken its maneuverability and increase its volatility;shadow banking can accelerate the development of interest liberalization by promoting the liberalizations of deposit interest rates and loan interest rates,speeding up the formation of pricing mechanism,enhancing financial institutions ' adaptions to reform,optimizing related supporting systems;on the one hand,shadow banking can boost the economy by solving financial problems of some small and medium-sized enterprises,encouraging savings transform into investments,enhancing the efficiency of capital operation,on the other hand,shadow can restrain economic growth and hinder economic structure transformation by increasing financing costs,the arbitrage behaviors of pursuing benefits in virtual economy,some capital flowing into high risk areas;shadow banks cause price rise mainly by intensifying the imbalance between social supply and demand.And this paper teased out the development models of shadow banks according to the reality and summarized the development characteristics of shadow banking.Based on the monthly data from 2009 to 2017,this paper established vector auto-regressive models with shadow banking and other models without shadow banking,and conducted an empirical test on the impact of shadow banking on monetary objectives by using impulse response function and variance decomposition method.After the theoretical analysis and empirical test above,this paper comes to three main conclusions as following:(1)Shadow banks can cause broad money supply decrease that has defects in statistics by attracting part of the money supply,Money supply can have positive impact on economic output and the price level,but shadow banks the correlation between money supply and economic output and the correlation between money supply and price,in which case the regulatory accuracy of expansionary monetary policy is weakened.(2)Shadow banks can enhance the real interest rate.Interest rate can have negative impact on the economic output and have positive impact on price,shadow banks weaken the correlation between interest rate and economic output but strengthen the correlation between interest rate and price,the tightening interest rate monetary policy cannot regulate economic overheating and stabilize prices perfectly under these circumstances.(3)Shadow banks increase the difficulty of coordinating the contradiction of achieving economic growth and pricestability these two ultimate monetary goals.Shadow banks promote the actual economic growth in the short term but hinder the economic growth in the long run,boost the price whose rising speed is faster in the early stage.In view of these conclusions,this paper puts forward adjusting monetary intermediate objectives,deepening the interest rate liberalization,strengthening the information disclosure of shadow banking these three policy suggestions.