The Research on Shadow Banking System in China

The shadow banking system has grown stronger in the process of evading supervision. Together with traditional commercial banks, it has become an important participant in the financial system, which has caused a fundamental change in the structure of the global financial system. As an exogenous reform force in China’s special period, Shadow Bank has become an important channel for financial resources to “disconnect from reality”. Despite the lack of substantial securitization, China’s shadow banking system has developed rapidly. This paper analyzes the development motivation.This paper believes that the scope of China’s shadow banking system can be defined according to the nature of the fund supply side.

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Non-banking financial intermediation and phenomena of shadow money in modern economy

Finance and Credit ◽

10.24891/fc.27.8.1694 ◽

2021 ◽

Vol 27 (8) ◽

pp. 1694-1709

Author(s):

Vladimir K. BURLACHKOV

Keyword(s):

Commercial Banks ◽

Financial Intermediation ◽

Banking System ◽

Banking Regulation ◽

Developed Countries ◽

Bank Credit ◽

Shadow Banking ◽

Economic Agents ◽

Shadow Banking System ◽

Lending Activity

Subject. The article addresses the non-banking financial intermediation (shadow banking system) as it is successfully expanding nowadays both in developed countries and emerging economics. Objectives. The study aims at conducting a comprehensive analysis of the specifics of non-banking financial intermediation, revealing its impact on economic agents’ activities, causes and consequences, and elaborating the methodological framework for effectiveness of modern monetary policy. Methods. I employ methods of scientific abstraction, induction, deduction, synthesis, and comparative analysis. Results. In the modern national economy, along with the money, created by the central bank and commercial banks, there are highly liquid financial instruments called shadow money. The scope of its application is shadow banking (financial intermediation) outside the banking system. The use of shadow money is caused by high demand for credit resources. Conclusions. The high activity of shadow banking and increased turnover of shadow money resulted from a transfer to Basel standards of banking regulation in the 1990s, which affected the lending activity of commercial banks. Under these conditions, the demand for loans provided by non-bank credit and financial institutions increased. The market of non-bank credit products was formed. However, the process of lending in the shadow banking is associated with high risks and non-stability of shadow money, widely used in this sphere.

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Competitive Advantages of Shadow Banking Industry: An Analysis Using Porter Diamond Model

Business Management and Strategy ◽

10.5296/bms.v6i2.8334 ◽

2015 ◽

Vol 6 (2) ◽

pp. 15 ◽

Cited By ~ 9

Author(s):

Arash Riasi

Keyword(s):

Systemic Risk ◽

Banking Industry ◽

Banking System ◽

Firm Strategy ◽

The Other ◽

Shadow Banking ◽

Competitive Advantages ◽

Diamond Model ◽

Shadow Banking System ◽

Global Financial System

<p>This paper tries to find out why shadow banking system has become so competitive in the global financial system and how it can be controlled. For this reason we use Porter’s diamond model to find the competitive advantages of shadow banking. Based on the results of this study it can be concluded that factor conditions, chance and government do not contribute to the competitiveness of shadow banking industry. On the other hand the results suggested that related and supporting industries, firm strategy, structure and rivalry, and demand conditions contribute to the competitiveness of shadow banking industry. It is important to regulate the activities of shadow banking industry in order to prevent this industry from creating systemic risk.</p>

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Conclusion

Taming the Megabanks ◽

10.1093/oso/9780190260705.003.0014 ◽

2020 ◽

pp. 335-356

Author(s):

Arthur E. Wilmarth Jr.

Keyword(s):

Conflicts Of Interest ◽

Banking System ◽

Financial System ◽

Safety Net ◽

Shadow Banking ◽

Financial Conglomerates ◽

Shadow Banks ◽

Regulatory Systems ◽

Shadow Banking System ◽

Investment Advisers

A new Glass-Steagall Act would break up universal banks and end the conflicts of interest that prevent universal banks from acting as objective lenders and impartial investment advisers. It would produce a more stable and resilient financial system by reestablishing structural buffers to prevent contagion between the banking system and other financial sectors. It would improve market discipline by preventing banks from transferring their safety net subsidies to affiliates engaged in capital markets activities. It would shrink the shadow banking system by prohibiting nonbanks from issuing short-term financial claims that function as deposit substitutes. It would remove the dangerous influence that large financial conglomerates exercise over our political and regulatory systems. It would end the current situation in which our financial system and our economy are held hostage to the survival of universal banks and large shadow banks. It would restore our banking system and financial markets to their proper roles as servants—not masters—of nonfinancial business firms and consumers.

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Funny Money or Legitimate Finance? Shadow Banking and Policy Impacts in China

American Behavioral Scientist ◽

10.1177/00027642211020060 ◽

2021 ◽

pp. 000276422110200

Author(s):

Sara Hsu ◽

Xun Han

Keyword(s):

Banking Sector ◽

Banking System ◽

Financial System ◽

Financial Sector ◽

Banking Regulation ◽

Shadow Banking ◽

Data Set ◽

Money Flows ◽

Shadow Banking System ◽

The Impact

Government officials in China have taken different views regarding shadow banking. Some have seen the industry as overly risky, potentially undermining the formal financial system, while others have asserted that it is an increasingly important part of the financial system, filling a gap in finance provision to particular sectors and smaller firms. Do their views matter? Regulators have striven to crack down on the riskiest practices in shadow banking, but are the policies effective? In this article, we analyze the impact of government attitudes and actions on the shadow banking sector. Using a unique data set based on information collected from various sources in a difference-in-difference model, we find that shadow banking regulation plays a strong role in China’s financial sector, while contradictory government views (in the form of commentary in the People’s Daily) on shadow banking do not. This reveals that shadow banking is strongly affected by political authority when it is codified into regulation. Only some aspects of shadow banking can be legitimized through regulation, while the remainder of China’s financial system remains constrained due to state dominance over the financial sector. This underscores the “funny” nature of shadow banking’s money flows. This article is one of the first to study the effects of government views and regulations on the shadow banking system.

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The Safe-Asset Share

The American Economic Review ◽

10.1257/aer.102.3.101 ◽

2012 ◽

Vol 102 (3) ◽

pp. 101-106 ◽

Cited By ~ 103

Author(s):

Gary Gorton ◽

Stefan Lewellen ◽

Andrew Metrick

Keyword(s):

Commercial Banks ◽

Banking System ◽

Shadow Banking ◽

Stylized Facts ◽

Time Period ◽

Shadow Banking System

We document that the percentage of all U.S. assets that are “safe” has remained stable at about 33 percent since 1952. This stable ratio is a rare example of calm in a rapidly changing financial world. Over the same time period, the ratio of U.S. assets to GDP has increased by a factor of 2.5, and the main supplier of safe financial debt has shifted from commercial banks to the “shadow banking system.” We analyze this pattern of stylized facts and offer some tentative conclusions about the composition of the safe-asset share and its role within the overall economy.

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IMF, BIS, and World Bank: On the Intra-institutional Articulation of the International Financial System

Management and Economics Research Journal ◽

10.18639/merj.2018.04.519674 ◽

2018 ◽

Vol 04 (S1) ◽

pp. 48

Author(s):

Maria de Fatima Silva do Carmo Previdelli ◽

Luiz Eduardo Simões de Souza ◽

◽

Keyword(s):

World Bank ◽

International Monetary Fund ◽

Banking System ◽

Financial System ◽

Shadow Banking ◽

The Third ◽

International Financial System ◽

Regulation And Supervision ◽

Shadow Banking System ◽

The International Monetary Fund

The international financial system could be organized into three groups. According to this classification, the first group includes the organizations that exercise the functions of regulation and supervision. In the second, we have those that are regulated and supervised by the former, and in the third, we find the organizations that do not follow such rules or supervision, forming the so-called shadow banking system. This article seeks to examine the first group, and, more specifically, how the International Monetary Fund articulates with the primary elements of such a group.

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ANALYSIS OF THE CONTRIBUTION OF SHADOW BANKING SYSTEM TO THE ECONOMIC GROWTH OF WAEMU COUNTRIES

International Journal for Innovation Education and Research ◽

10.31686/ijier.vol4.iss5.540 ◽

2016 ◽

Vol 4 (5) ◽

pp. 68-84

Author(s):

Mamadou Mbaye

Keyword(s):

Economic Growth ◽

Developing Countries ◽

Empirical Research ◽

Public Funding ◽

Research Work ◽

Banking System ◽

Financial Resources ◽

Shadow Banking ◽

Shadow Banking System ◽

The Impact

The goal of this article is to analyze the contribution of shadow banking system to the economic growth of WAEMU countries. The study focuses on the specific case of Senegal. Shadow banking is a market of multiform capital exchanges and a socialization of investment risks. Its emergence is an indicator of economic maturity which proves the actors care about efficient allotment of financial resources and reflects a widespread change in the perception of the asymmetry linked to funding. Our theoretical as well as empirical research work enabled us to assess the impact of a virtually distant phenomenon on the growth for our still fragile developing countries. The results of the model show us that shadow banking influences positively economic growth because the elasticity of non-banking public funding obtained by using a coefficient of is positive ( >0). The elasticity reflects the behavior of the growth following a variation of up to 1% of non-banking public funding. That corroborates the existence of a strong complementary relationship between these two variables. Therefore, shadow banking is a potentiality for financing and even a key instrument for fundraising and therefore promotes economic growth.

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