Research On Financial Disintermediation And Its Impact On China’s Commercial Banks

Financial disintermediation is an inevitable problem in the implementation ofmarket-oriented development process. As the main indirect financing channel of onecountry, commercial banks have a very big impact on the financial industry development.Money directly reach the financiers’ hands not through commercial banks because of thefinancial disintermediation, forming a cycle out of the banking system, the financingintermediary role of commercial banks is thus weakened.With the reform of the financial system, the need of interest rate marketization and thedevelopment of capital market, China’s commercial banks are also faced with the distressbrought about by the financial disintermediation. The rapid development of capital marketcauses demanders of funds to have diverse financing channels, they directly raise theneeded funds in the capital market through the issuance of bonds, stocks and other means,that reduces dependence on bank loans. Residents no longer only deposit the money in abank as before, they start to invest in higher-yielding bonds, stocks and other financialinstruments. The importance of the commercial banks and other indirect financialintermediaries in the financial system has decreased, the traditional business has received aserious challenge.The article compares the performance and impact of domestic and foreign financialdisintermediation, and proves that financial disintermediation indeed has an impact on thetraditional business of commercial banks in China by an empirical analysis, then, analyzesthe reasons for financial disintermediation from main five aspects including nationalpolicies, economic development, social environment, micro-economic entities’ choice andcivil lending, lastly, puts forward coping strategies of China’s commercial banks throughlearning from good experience of dealing with the financial disintermediation abroad. Thefinancial disintermediation largely has made a definite impact on China’s commercialbanks, but also certain opportunities for the development. In the context of the financialdisintermediation, China’s commercial banks should seize the opportunities brought about by the financial disintermediation, strive to develop China banking sector after financialcrisis, and lay a solid foundation to better adapt to the international financial environment.