The Study Of The Banking Intermediary Function In Internet Era

1. Topic Selection and Purpose of the ThesisDuring the 1990s ,the development of Internet and the loosening of financial supervision had brought unprecedented impact to the financial system , which was reflected not only by the changing of management pattern in the financial sector but also by people's newly scanning on traditional financial concepts.Internet and Information Technology has changed the pattern of information production and transmission largely reduced the cost of its search and collection. It has also greatly weakened the information advantages of financial intermediaries such as commercial banks and the like. Commercial banks have encountered unprecedented challenge, due to the loosening of financial supervision, more and more intense competition in the financial sector, especially the appearance of financial intermediaries like money market mutual fund, and the contraction in the market shares of commercial banks, the decreasing of traditional savings and loan services. So many people predict that the traditional commercial banks will vanish, being the dinosaur in the 21st century.More than ten years have passed, but commercial banks haven't vanished during the development of Network Economy. On the contrary, they have not only still existed in the Internet Time, but also developed a lot with the help of technical backing up supported by Internet and Information Technology and competition environment after the loosening of financial supervision .The study in this problem makes sense both theoretically and practically.By thorough analysis in commercial bank's functions, this thesis reveals their characteristics in financial functions which are so different from both the other financial intermediaries and financial markets. Furthermore, it studies the influences to each function of financial intermediaries owing to the progress in Internet and Information Technology and the deregulation in finance .Then, reasonable explanations are given to the existence and development of commercial banks in Internet Time.2. The structure of the thesisChapter 1 is the first part of this thesis:In this part, it analyzes Network Economy and its operation characteristics, and studies impact of the development of network to financial industry .On this basis, it shows a variety of theoretical analyses and the empirical evidences that the commercial banks will vanish during Network Time. By contrast with the development of commercial banks, the main problem studied in the thesis is suggested.Part II is composed of Chapter2 and Chapter3 of this thesis:On reviewing the theories in financial intermediaries, this part analyzes their limitations in the network of commercial banks. It analyzes the cause for the existence of financial intermediaries from the aspect that some financial intermediaries can solve a certain defect of the imperfect markets. Since studying financial intermediary as a whole, these theories can not reveal the characteristic of commercial banks that are different from financial intermediaries, and the development of commercial banks in the Network Time. The functional view of the financial intermediaries reveals a new insight of research on them. However, the functional view takes the whole financial system as its object of research and opposes the classification of the institutions; therefore, it can't make a rational explanation to commercial banks` existence and development in the Network Time. We can't grasp the characteristics of commercial banks or adequately explain their existence and development unless the functional view is applied to research on such kind of financial institutions like commercial banks.Partâ…¢is consisted of the chapters from four to seven.Chapter 4 studies the intermediary payment function of commercial banks in Network Age. The intermediary payment function is the most ancient function of commercial banks, and it occupies an extremely important position in the management of commercial banks. However, the intermediary payment function also becomes strongly affected by the development of network because of its characteristic that it highly dependents on information technology but lowly on the professional knowledge about finance. Electronic currency, payment by means of network, money market mutual fund etc. have all caused certain effects on the intermediary payment function of commercial banks, yet commercial banks are still playing a ultimately decisive role in social payments with the aid of the payment system which has been built up in the management of commercial banks over a long period of time.Chapter 5 is about the intermediary function in financing of commercial banks in Network Time. The development of the network information technology, which has weaken the information superiority of commercial banks and the importance of the branch and reduced the transaction cost in the process of financing. But information asymmetry problem, the cost of public participation in financing and the advantage of the credibility in the process of bank financing and advantages of the risk management still exist. At the same time, the development of network technology provides a new business channel for commercial banks, and the financial intermediary function of commercial banks has not been deprived of.Chapter 6 introduces the function of risk management of commercial banks in Network Time. With financial globalization, the deregulation in the finance and the development of Internet and Information Technology, the risks of the financial sector have increased. But the risk management functions of commercial banks have been strengthened in the environment of the loosening of financial controls and the support of new technology.In Chapter 7, the creation currency and information media function of the commercial banks at Network Age are the main contents that we study .It is a characterized function of commercial banks that the currency is created, the mutual fund of money market does not possess the ability that the currency creates, the development of the electronic currency can't change the ability of the money supply at present either, the development of the electronic currency can't change the system of the money supply at present either, Network Time, still need the currency of the commercial bank to create the function; In Network Time, the commercial bank relies on the initiative media information of technical support of information, it is a pivot of the economic information transmission.Part IV is chapter 8 of the thesis:Chapter 8 is the summary of the chapters above. This chapter has probed into the bank of separating and paid the intermediary a question of functions and financing intermediary's function at first, think, separate bank function demand high cost cut, can make the anticipated result perhaps extremely. The development of the information technology of the network has relieved the asymmetric problem of fluidity in debt of the money of commercial bank, have separated the function of the bank and already lost its realistic meaning. On this basis, the thesis, to the merger of commercial bank of Network Time, customer's direction, questions such as the division among specialized departments, etc. have carried on simple sums up and are analyzed. Draw the conclusion that the bank is not the dinosaur in the 21st century.3. Main innovations of the thesis(1)In theory-researching, some financial agencies analyze the cause for the existence of financial agencies, mostly from the point of view of their solution to a certain flaw of the incomplete and immature market .Researching financial agencies as a whole, however, these theories often fail to reveal the distinguishing features of commercial banks that set it apart from any other financial agency, nor to clarify the development of commercial banks in the internet-dominated era.Functional view of financial medium demonstrates a new visual angle in the financial medium research. However, functional view takes the whole finance system for researching object and opposes dividing of setups. Therefore, it's impossible to give a reasonable explanation for the continuity and development of commercial banks in Network Time.To analyze a specific financial institution--- the commercial banks, by borrowing the function-analyzing perspective of functional frame of reference, this is an innovational feature in the thought way of the dissertation.(2) It analyzes the effect of commercial bank's financial function in the Network Time and the changing of the means in putting functions into practice one by one from the functional angle, studies the application of the technological progress in the realization of the bank function, and also accepts the viewpoint that the Fama commercial bank's specific characteristic is to put the functions of the payment and financing medium into one unity and to put the monetary supply into the study of the commercial bank's function. All of these are the innovations in the paper contents.(3)On the analyses of the technological characteristics of network and all kinds of the bank's functions, it argues that the technological progress on the network information and the development of the financial innovation tools can help alleviate the problem of the asymmetric on the fluidity of commercial bank's balance sheet .Then comes the collusion that it is impractical to separate the functions of the payment medium and financing medium. This can be the innovations of the viewpoint.