| According to the financial intermediary theory,a financial intermediary mainly has two functions: one is the accommodation of funds,and the other is risk allocation and management.The former is the shallow interpretation of finance,while the latter is the essence of financial transactions,the two have a progressive relationship.As one of the most important industries,finance goes as a tool to serve other industries.How to better serve the real economy and help China to achieve high-quality development,is the core issue of financial innovation and development.In recent years,the development of new technologies,especially digital technologies,has been continuously integrated with economic and financial activities,along with it came digital financial activities,which affect China’s financial institutions and financial market system profoundly.Bank loans are the main financing channel in China.The deep integration of technology and finance promotes perform the banking functions,which is an important connotation of the financial supply-side structural reform.Derived from the financial intermediation theory,this paper studies the impact of the rapid rise of digital finance on banking functions.The research conclusions of this paper have theoretical reference significance for digital finance to improve the efficiency of credit resource allocation,prevent and resolve financial risks,and promote the structural reform of the financial supply side.This paper is based on the micro-subject of commercial banks,it can be seen by going back to the theory of financial intermediation that information asymmetry and transaction costs are the reasons for the long-term existence of traditional financial intermediaries.In recent years,digital technology has provided a viable solution to this problem.Domestic fintech companies represented by large platform enterprises compete with commercial banks,forcing commercial banks to use digital technology to continuously achieve digital transformation,financial models such as open banking are also emerging.Against this background,this paper seeks to explore the changes of the commercial banks’ behavior and the impact on their functions under the everchanging wave of digitalization.The paper firstly constructs a micro-level digital financial index for banks based on Peking University’s Digital Inclusive Finance Index and the financial licensing data of 176 commercial banks nationwide,measures banks’ liquidity creation index and risky asset levels,and portrays the characteristic facts of digital financial development,fluctuations in banks’ liquidity creation and aggregation of risk levels.Secondly,in the fourth and fifth chapters,the empirical analysis of banks at the micro level is carried out based on panel regression,and the impact mechanism and heterogeneity are further discussed.Chapter 6 discusses the impact of regional digital finance development on the financing of local commercial banks of different sizes and enterprises with different attributes from the perspective of regional digital finance development.The main conclusions of this paper include,Firstly,continuing the analytical paradigm of modern financial intermediation theory,financial intermediation exists because of information asymmetry and transaction costs.Firstly,continuing the analytical paradigm of modern financial intermediation theory,financial intermediation exists because of information asymmetry and transaction costs.From the perspective of digital technology applications,the introduction of big data as a new factor of production has "hardened" the "soft information" that had to be obtained through human and relational means.Not only is the information asymmetry at the time of lending reduced,but through timely updates of big data,the transaction dynamics of the lender can also be accessed promptly after lending,mitigating the problems of adverse selection and moral hazard.In addition,the iterative update of information processing technologies such as artificial intelligence,blockchain,and cloud computing has greatly reduced the search cost,information cost,communication cost,and supervision cost for both sides of the transaction,making it easier for financial services to reach customers.This has lowered the threshold for financial services that originally served only "niche" groups,expanded the "set of transaction possibilities",and pushed the practice of financial inclusion into the era of digital financial inclusion.Secondly,from the perspective of fintech companies,the impact of digital finance on traditional financial institutions is mainly achieved through the competition effect,cooperation effect,and technology spillover effect.The market competition effect refers to the changes in the market competition pattern brought by fintech companies as new competitors in the market;the technology cooperation effect refers to the development of digital technologies by fintech companies and their "technology empowerment" through technical cooperation with traditional financial intermediaries;The technology spillover effect refers to the digital technology level of traditional financial intermediaries being enhanced by the active or passive technology diffusion of fintech companies.This paper argues that digital finance affects the functions of commercial banks mainly through these three channels.The effect of these three channels varies dynamically in terms of the strength of the impact at different stages of the development of digital finance,and the impact on banking functions also shows dynamic changes.Third,one of the core functions of commercial banks is liquidity creation.The development of digital finance has a "U" shaped impact on the liquidity creation of traditional financial institutions in the form of "market crowding out followed by technology spillover",with the inflection point occurring in 2015.In other words,the initial development of digital finance brought about a "catfish effect",intensifying market competition and reducing bank liquidity creation.However,as the technology spillover effect became apparent,digital finance effectively boosted liquidity creation.From a comparative perspective,the impact on large state-owned commercial banks and banks in the western region is not significant,while joint-stock commercial banks,regional commercial banks,and banks in the central and eastern regions are more responsive.The second core function of commercial banks is risk-taking and management.The development of digital finance has reduced the overall risk of commercial banks,and this is reflected in a significant reduction in on-balance sheet risk and an increase in off-balance sheet risk.Mechanism analysis shows that commercial banks have expanded off-balance sheet business risks and increased non-interest business income under the impact of digital finance.Heterogeneity analysis showed that commercial banks with lower capital adequacy ratios had more incentives to develop off-balance sheet business.That is,off-balance sheet risk transfer was more pronounced for this group of banks;digital finance had a more significant effect in reducing the overall risk of non-listed banks.Counterfactual tests suggest that the post-2011 development of digital finance has had a significant effect on the impact of bank risk.Commercial banks fulfill the function of efficiently allocating limited credit resources in the macroeconomy.Further analysis,using regional-level digital finance indices and local credit data for listed companies,finds that digital finance significantly increases the volume of credit contracts,promotes loan placement,and alleviates the ’credit distress’ of private enterprises with significantly shorter loan maturities and more cautious loan placement,while state-owned enterprises are not affected. |
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