The Impact Study Of Commercial Banks In Shadow Banking Business On The Risks

With the reafirmation of financial stability,shadow banking has received increasing attention.Compared with developed countries such as Europe and the United States,whose shadow banking relies mainly on mature securities and derivatives markets,China has relatively simple shadow banking business.This thesis defines shadow banking in China as financial business that are similar to traditional bank credit business,cooperating with other financial institutions,carrying out different business to achieve deadline conversion and liquidity improvement.It has higher leverage and less supervision,bringing greater systemic risks.According to the main business entities,it is divided into shadow banking within the commercial banking system and outside the commercial banking system,the former includes some businesses outside the balance sheet of commercial banks,while the latter includes private lending,small loans and P2P network credit.Referring to the statistic,commercial banks are the main participants of shadow banking in China.Therefore,this thesis takes the commercial banks in shadow banking business as the research subject,exploring their main modes,business forms and impact on operating risks.According to definition,commercial banks in shadow banking business cooperates with different financial institutions,divided into four modes-banking and trust cooperation model,banking and banking cooperation model,banking and securities cooperation model,banking and fund cooperation model.No matter which types of financial institutions are involved in the cooperation,specific business must be carried out.These specific business mainly include--commercial bank financing products,entrusted loans and undiscounted bank acceptance bills.The size of shadow banking business in each commercial bank will be simply summed up by these three components.These three business scales are disclosed in the financial reports.As the focus of the whole paper,this thesis studies the impact of commercial banks in shadow banking business on the risks.In the theoretical analysis,commercial banks in shadow banking business have impacts on the credit risk,market risk,operational risk,liquidity risk,legal risk and reputational risk.These risks are the main types of operating risks.In addition,some data also show the positive correlation between the commercial banks in shadow banking business and the operating risks,as well as the influence of other factors on business risks.In the empirical study,this thesis selects 12 large,panel-based and city commercial banks,collects panel data from 2007 to 2016,taking the Z index representing the operating risk of commercial bank as the dependent variable,the scale of the shadow banking business in commercial banks as independent variable,constructs the panel model.The empirical results show that commercial banks in shadow banking business will significantly increase their own risks.The negative effects of different shadow banking business are different and significant:other factors unchanged,the fluctuations in risks arising from fluctuations in the scale of commercial bank financing products are greater than the fluctuations in the size of entrusted loans,and the latter are also larger than the fluctuations in the size of undiscounted bank acceptance bills.In addition,model control variables such as GDP,asset of bank,non-interest income share and loan-to-deposit ratio also have significant correlations with the risk.The final part analyzes path of the effect by separating the Z index into three constituent factors.The study finds that commercial banks in shadow banking don't affect the return on assets,but significantly reduce banks' capital adequacy ratio and intensify the fluctuations of return on assets,intensifying the risks.Further verifying assumptions,when banks' loan-to-deposit ratio is limited,they will engage in shadow banking business more actively,which would reduce the capital adequacy ratio,increase the fluctuations of return on assets,ultimately increasing the operating risks.In general,commercial banks in shadow banking business have negative influences on their own risks,which must arouse the attention for the risk supervision department of the commercial banks,striking a balance between safety and profitability.At the same time,it also poses great challenges to the regulatory authorities.Regulators should step up supervision,grasp the scale of shadow banking business of commercial banks and monitor the changes in financial data.