Analysis On Effect Of Banking Industry Market Structure To Financial Stability Of China

the global economic has changed significantly since the1970s, and the process of financial globalization is accelerating. On the one hand the Market structure of banking industry is Improving, on the other hand, competition is more intense. banking institutions take more risk to increase revenue, the increasing risk make the bank more Vulnerable, the frequency and scope of banking crisis was on a significant upward.China's financial system is based on bank system, bank-based financing dominate in China's financial system.china has resisted the financial shocks though the previous financial crisis, making sure the real economy can develop sustainable and rapidly.With the developing of macro-environment in China's financial sector In the future, the risks will be more complex. It is significant to adjust the structure of the banking industry to it in order to maintain financial stability and development. Most of the studies in Previous literature are on based on developed countries in this aspect, rarely based on china. So it has important theoretical and practical significance to study China's banking market structure on financial stability effect.The paper carries out theoretically and empirically researches on the effect on Chinese banking market structure to the financial stability, Based on industrial organization theory, bank industrial organization theory, and the econometric as analysis tools. Firstly, the paper analyzes impact of financial stability to banking market structure in typical countries, then give important support for the following theoretical analysis. Secondly, the paper measured the Chinese banking market structure and financial stability by means of structuralism and non-structuralism approach. Then the paper explored mechanism on the impact of to financial stability, there are mainly four aspects On which banking market structure has impact effect on financial stability:the efficiency of operation of banking industry, transmission mechanisms and tools of monetary policy, the target and method of banking supervision and regulation, the motivation and models of access from foreign banks'entering, after the theoretical analysis, the paper carries out empirical research on the China's banking market structure's impact on the financial stability. The paper also does empirical analysis on the impact on the characteristics shown both in long-term and short-term using of econometric methods.Then it proposes optimal path selection of the banking structure in the SMEs' financing. Finally, the paper proposed countermeasures to improve banking market structure and promote the financial stability.Through theoretical research and empirical testing, the main conclusions of the paper are as follows:(1) the measure to China's banking market structure results that:Overall, the competition in China's banking industry has increased a lot, both from market concentration of structuralism and from PR of the Herfindahl index of non-structuralism.(2) There is a significant gap between provinces of China and eastern, central and western of the country in China's banking market structure. The competition strength in loan market is greater than that of deposit market in provinces of China, and the reform of Chinese banking market structure effects on the policy of deposit market very well, but it is in a non-synchronisation stage to loan market of each part of China. The competition in banking market of eastern part is greater than that of national, central and western market, the banking market structure has shown a weak sign of convergence in the middle part of the country internally, but the regional differences are more and more bigger to internal competition in eastern and western China.(3) The measure the state of financial stability shows that:During1986-2008, China's financial system is not a highly unstable situation, it basically develop smoothly using of quantitative analysis method.(4)In theory, the transmission system of financial stability affected by banking marketing structure is that it directly affects financial stability through the changes of bank self-efficiency and competition level and it indirectly influence the national financial stability through Macro-economic policy (monetary policy and bank supervision) and the degree of openness.(5) long-term positive relationship is shown between China's banking industry market structure and financial stability. with the growing of banking Competition China's financial system will be more stable In the long run. If they are in the non-equilibrium state, they will adjust back to a certain equilibrium at some ratio, and the banking structure lag to financial stability on the impact.(6) Analysis, breaking of the monopoly of state-owned commercial banks and enhanced competition in banking markets dont change the original scale division of labor in banking industry. SMEs still obtain loans from small and medium-sized financial institutions, while large bank loans to SMEs is not only increased, but also shows a downward trend.Small and medium financial institutions increasing market share is more conducive to financial stability in current stage of economic development.This paper attempts to be innovative in the following three aspects:(1) combining the structuralism with way of measure of new industrial theory, multi-perspective studing the chinese banking market structure and competition changes.(2) Try to apply comprehensive difference index to banking industry market structure analysis of the regional differences, inspected our country province and east center-west region internal market structure of banking industry competition degree difference.(3) analyzing the mechanism of the banking market structure effect on the financial stability from the industrial aspect, setting up mechanism of the banking market structure affect on the financial stability from the bank Micro-level efficiency, and three macro-dimensions including monetary policy, financial regulation, opening-up respectively, and have an empirical test on them.(4) Analyze Optimal banking market structure under financial stability based on SMEs financing perspective...