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The Impact of Business Scale of ¡°Shadow Banking¡± on Credit Risk of Commercial Banks --Take Ten Domestic Listed Commercial Banks as Examples

Author

Listed:
  • Sijia Wen
  • Jishan Ma
  • Yawen Pan
  • Yuan Qi
  • Ruizhi Xiong

Abstract

In this article, according to search for the definition of shadow banking, we can make sure the business kinds of ¡°shadow banking¡±, discuss the influence of business in ¡°shadow banking¡± on credit risk of commercial banks, and study the elements which may increase the credit risk of commercial banks by using the semi-annual panel data during 2011-2016 of 10 listed banks. Then we can come to some primary conclusions: The credit risk of commercial banks is related to the shadow banking business. All the survival scale increment of financial products increasing, the size of entrusted loans increasing in increment, and the increasing in the size of guarantee commitments will increase the credit risk of commercial banks. There is no obvious relationship between trust loan business and bank credit risk. Our study is of great significance for the government to supervise the off-balance-sheet business of commercial banks. At the same time, it also fills the vacancy of domestic commercial banking ¡°shadow banking¡± business empirical research.

Suggested Citation

  • Sijia Wen & Jishan Ma & Yawen Pan & Yuan Qi & Ruizhi Xiong, 2017. "The Impact of Business Scale of ¡°Shadow Banking¡± on Credit Risk of Commercial Banks --Take Ten Domestic Listed Commercial Banks as Examples," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(5), pages 94-105, May.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:5:p:94-105
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    References listed on IDEAS

    as
    1. Christian Calmès & Raymond Théoret, 2011. "The rise of shadow banking and the hidden benefits of diversification," RePAd Working Paper Series UQO-DSA-wp042011, Département des sciences administratives, UQO.
    2. Instefjord, Norvald, 2005. "Risk and hedging: Do credit derivatives increase bank risk?," Journal of Banking & Finance, Elsevier, vol. 29(2), pages 333-345, February.
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    Cited by:

    1. Muhammad Farhan Basheer & Waeibrorheem Waemustafa & Mohamad Helmi Bin Hidthiir & Saira Ghulam Hassan, 2021. "Explaining the endogeneity between the credit risk, liquidity risk, and off-balance sheet activities in commercial banks: a case of South Asian economies," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 14(2), pages 166-187.
    2. Philip Arestis & Maggie Mo Jia, 2019. "Credit risk and macroeconomic stress tests in China," Journal of Banking Regulation, Palgrave Macmillan, vol. 20(3), pages 211-225, September.

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    More about this item

    Keywords

    commercial banks; the business scale of ¡°shadow banking¡±; credit risk;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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