Study On Transforming Indirect Financing Into Direct Financing

This paper takes the practice of transforming indirect financing into direct financing in the current financial development of China as the research background, the function innovation of commercial banks based on transforming indirect financing into direct financing as the logical core, studies systematically on the function innovation of commercial banks in China during the course of transforming indirect financing into direct financing and their internal mechanism, reveals that the commercial banks get through the channel from indirect financing to direct financing via function innovation, so as to optimize financial function structure, and exert the effects of financial innovation and development.This paper first sorts out the evolution of financial functions and the development of financial intermediation theory from the perspective of historical development. In financial practice, financial functions are continuously developing from basic functions to derivative functions with the historical development, therefore financial intermediation theory gradually develops from the traditional financial theory with credit intermediation function and credit creation function as the core into modern financial intermediation theory with the risk management function and function of reducing participation cost as the core, and the financial function perspective with financial function spiral-type dynamic evolution as the core. The paper then makes further study on the evolution of commercial bank system in China, transforming indirect financing into direct financing and core function innovation. With the deepening of financial reform in China, at present, the evolution of commercial bank system in China has entered the period of accelerated development of transforming indirect financing into direct financing, its core functions are gradually converting from credit intermediation and credit creation function in the past into risk management function and function of reducing participation cost. Based on the aforesaid theoretical analysis and practical research, this paper then makes a detailed research on the internal mechanism of the function innovation of commercial banks in China. Through a comparison between the internal mechanism of the function innovation of commercial banks under the background of financial restriction dominated by indirect financing and that under the background of transforming indirect financing into direct financing, this paper discusses the market endogenousness and route inevitability of function innovation of commercial banks in China under the background of transforming indirect financing into direct financing. In the last part, this paper studies various practical effects generated from function innovation of commercial banks based on transforming indirect financing into direct financing from the angles of financial market structure optimization effects, market-oriented interest rate effects, capital allocation efficiency effects, etc.The major contribution of this paper lays in making a systematic research on the current phenomenon of transforming indirect financing into direct financing in China from the perspective of function innovation. It breaks through the traditional dichotomy on indirect financing and direct financing, reveals the internal mechanism of commercial banks in China in transforming traditional indirect financing products into direct financing products, and makes beneficial exploration on the other new route of commercial banks in participating in the historical course of enhancing the proportion of direct financing in China, and the route and model for optimizing financial structure as well as promoting financial development.