The paper establishes a theoretical model depicting all conditions of the impacts of hedging and monetary fluctuation on loan behaviors of banks in China based on the property of hedging. Then the empirical research based on GMM methods is taken. The empirical results suggest that the loan size will be in increasing-decreasing condition corresponding to ascending hedging degrees with compensation swaps, in linearly increasing condition with deposit swaps and in decreasing-increasing condition with overnight lending swaps. Meanwhile, monetary fluctuation is negatively correlated to the loan size with the hedging of compensation swaps and positively correlated with the hedging of deposit swaps and overnight lending swaps. The empirical results approve the theoretical propositions, and show that the cause of the US subprime crisis in 2008 also exists in banking behaviors in China.