Impact Of Commercial Banks’ Engagement In Shadow Banking On Liquidity Risk

Since the 21st century,with the continuous advancement of interest rate marketization,the spread of commercial banks has gradually narrowed.In addition,bank loans have been strictly regulated and managed,and the scale of loans has been limited.Commercial banks are facing serious problems.As a result of competitive pressures,they began to change their operating methods and find new profit growth points.As an innovative business of commercial banks,shadow banking business has been rapidly developed and expanded.However,shadow banking is a double-edged sword.While bringing financial innovation,it is also easy to bring liquidity risks to banks because of its circumvention of supervision.The "money shortage" incident that broke out in 2013 is a typical example.Based on previous studies,this paper sorts out the development stages and changes of shadow banking business in the past decade,and explores the liquidity risk that may be brought to the bank by analyzing the specific operation modes of different businesses.At the same time,this paper collects relevant data of 78 commercial banks from 2011 to 2020,measures the liquidity risk by the proportion of net stable funds,constructs a dynamic panel regression model,and conducts an empirical study using the systematic GMM method.The empirical research results of this paper show that the increase in size of shadow banking business will bring a reduction in the proportion of net stable funds,which will lead to an increase in risk.Further analysis of the heterogeneity of this impact reveals that the shadow banking business of small and medium-sized commercial banks with relatively small assets will have a greater impact on liquidity risk.At the same time,the development of traditional bank credit business will weaken the impact of shadow banking business on liquidity risk to a certain extent.The study also finds that on-balance sheet shadow banking business has a greater impact on liquidity risk than off-balance sheet shadow banking business.Therefore,the regulatory agency should treat the shadow banking business objectively,strengthen information disclosure requirements for shadow banking business,and strengthen the liquidity risk supervision of commercial banks,especially for small and medium-sized commercial banks.Commercial banks should also appropriately carry out innovative business under the premise of well-developing traditional credit business.For off-balance sheet wealth management business,commercial banks can establish bank wealth management subsidiaries separately,and for on-balance sheet investment business,commercial banks should reasonably arrange the term structure and do a good job in liquidity management.