Research On Effectiveness Of Financial Regulation On Shadow Banking

The financing needs of China's real economy,the investment needs of residents and the regulatory arbitrage needs of financial institutions all contribute to the emergence of "shadow banking".China's shadow banking business development history hasn't been a long time,but its speed is very breathtaking.Moody's began to calculate the scale of shadow banking in China in 2011.In 2011,the scale was 19.2 trillion yuan,and by the end of 2018,the total scale had grown to 61.3 trillion yuan,with an average annual growth rate of 18.04%.Compared with western developed countries,the composition of China's shadow banking system has distinct characteristics:commercial bank occupies the absolute dominance,with other financial institutions mostly providing channels for shadow banking business."The shadow of the bank" is actually the main body of shadow banking in China,which is emphasis to shadow banking supervise.A variety of shadow banking business,including bank-trust cooperation,bank-securities cooperation and bank-insurance cooperation business,are constantly innovating.Now interbank business and asset securitization business have burst onto the mainstream.At the same time,regulators are issuing policies to limit the expansion of shadow banking,which tend to work only on some parts of the business and even promote the expansion of other parts.Therefore,the effectiveness of published regulatory policies needs to be verified by empirical analysisThis paper makes a systematic study on the effectiveness of shadow banking supervision by combining qualitative analysis with quantitative analysis method.Firstly,based on the explanation of the definition,current system,operation mode and scale measurement of shadow banking in China,this paper makes a detailed analysis of the regulatory context of shadow banking in the past decade divided into three phases,and analyzes the impact of regulatory policies with reference to the sub-scale of shadow banking.In the empirical part,this paper uses the dynamic panel model,selects the data of 170 domestic commercial Banks from 2008 to 2018,calculates the scale of shadow banking,introduces the index of regulatory intensity,and further analyzes whether regulatory policies effectively affect the scale of shadow banking.This paper finally draws the following conclusions:the intensity of regulatory policies issued by the government can effectively affect the overall scale of shadow banking,and the improvement of regulatory intensity can inhibit the expansion of the scale of shadow banking.In the case that the regulatory measures cannot cover the whole area,the scale of various businesses in the shadow banking system is affected by the intensity and focus of the regulatory policies,which is prone to the situation that one business goes down and others goes up.The regulation of commercial banks' capital requirements and liquidity indicators can limit the scale of their shadow banking business to some extent.Finally,this paper puts forward the corresponding policy suggestions according to the empirical and analysis results.