Shadow Banking,interest Rate Liberalization And Interest Rate Transmission

In the past decade,shadow banking has developed rapidly in China,which has become an important way of social financing besides bank credit in the financial market,attracting the attention of scholars and regulators at home and abroad.Based on the imperfection of China's current financial system,the theoretical and empirical analysis of shadow banking mainly focuses on its negative impact on economic and financial stability.At the same time,in the process of accelerating the interest rate liberalization in China,the shadow banking has dredged the path of interest rate transmission through the innovation of investment and financing channels,which plays a crucial role in the interest rate liberalization.This paper focuses on the two-way relationship between shadow banking and interest rate liberalization,as well as the impact of shadow banking on interest rate transmission.In the analysis of the scale of shado w banking,we have grasped its characteristics of taking commercial banks as the center,and selected 16 listed commercial banks' assets and liabilities which can represent the activities of shadow bank in their balance sheets to extract the main components,thus obtaining the"scale factor of shadow bank".On the other hand,because the interest rate liberalization in China follows the order of "loan before deposit",the interest rate liberalization can also be divided into deposit interest rate liberalization and loan interest rate liberalization.On the one hand,it analyzes the role of shadow banking innovation in promoting the liberalization of deposit and loan interest rates,and on the other hand,it analyzes the promotion of the regulation of deposit and loan interest rate on the shadow banking.Finally,it studies how the shadow banking interest rate unblocks the transmission path from moneytary market interest rate to credit market interest rate.After combing the development process and current situation of shadow banking,interest rate liberalization and interest rate transmission,the theoretical relationship and mechanism of the three are analyzed.Finally,we establish the FAVAR model and VEC model,and select the quarterly data from the second quarter of 2010 to the third quarter of 2019 for empirical analysis.The results show that:(1)Through the innovation of investment and financing channels and pricing mechanism,the development of shadow banking improves the interest rate level of monetary market,has a negative impact on the interest rate gap between shadow bank and traditional bank,and promotes the liberalization level of deposit and loan interest rate;(2)China's shadow bank is the product of financial repression and interest rate regulation,Specifically,the regulation of deposit interest rate has a positive impact on the scale of liabilities side of the shadow banking system,and the regulation of loan interest rate has a positive impact on the scale of assets side of the shadow banking system;(3)the promotion of the shadow bank on the marketization of deposit and loan interest rate makes the interest rate transmission mechanism more smooth,and also improves the interest rate transmission chain of "monetary market interest rate?shadow banking interest rate? credit market interest rate".Based on the above conclusion,this paper suggests that we should guide the development of shadow banking reasonably,accelerate the process of interest rate liberalization,and improve the financial market in China.Give full play to the financial innovation function of shadow banks,strengthen supervision of shadow banks in a scientific way,and promote the sustainable development of China's economy.