The Risks and Regulatory Reform of Shadow Banking

This paper presents a comparative study of Chinese and Ameirican shadow banking in the aspects of operation mode, financial tools, financial institutions, risk transmission and so on. The results show that, at present, Chinese shadow banking hasn’t basically entered the field of asset securitization, their financial tools are simple and the leverage ratio is low. Neverthless, huge risks hide in Chinese shadow banking which have negative impacts on the operation of traditional commercial banks, and the function of the credit creation of shadow banking weakens the effects of monetary policy, the high interest rates distort fund price and hurt real economy. Therefore, it’s necessary to improve relevant laws and regulations, supervise shadow banking, strengthen the cooperation of PBC, CBRC, CIRC and CSRC, introduce function supervision, increase the transparency of the information disclosure of shadow banking, construct the supervision framework that combines the macro-prudential supervision and the micro-prudential supervision, strengthen the early warning and dynamic monitoring of the systemic risks of shadow banking.