Research On The Strategic Choice Of China's Commercial Banks' Business With Financial Disintermediation

Financial disintermediation first appeared in the United States in the 1960th. It brought about both enormous challenges and opportunities to traditional mode of business in commercial banks.Along with the constant improvement of China's financial system, the rising level of financial development, as well as the acceleration of international economic integration process, financial disintermediation began to occur in China in 1990th and had a deepening trend. It is undeniable that the deepening of financial disintermediation is indeed affecting the traditional banking business but supporting financial innovation to banking institutions and improving the efficiency of the entire banking industry at the same time. However, the sub-prime debt crisis in 2007 revealed that the risks generated by financial disintermediation are reducing the positive effects of financial disintermediation. The essential purposes of the study conclude that locating China's commercial bank in the disintermediation stage accurately, evaluating and weighing the influence of disintermediation objectively, as well as making a suitable choice of commercial banks' business strategy.In the article, the combining method of theoretical and practical analysis is adopted to thoroughly comprehend the specific problems in China; the combining method of horizontal and vertical analysis is adopted to compare the international environment and local environment of commercial banks which are facing financial disintermediation; the combining method of qualitative and quantitative analysis is adopted to support the points and conclusions as an important tool, the specific indicators contains deposit-loan ratio, deposit-loan difference, related rate of direct financing, related rate of indirect financing and disintermediation depth.From a macro point of view and with a dynamic research method, the conclusion which is based on the evolution of financial disintermediation in China is that financial institutions and financial markets are not substitute relation but highly complementary one. China's commercial banks facing financial disintermediation should make appropriate adjustments to the business strategy actively, changing the monopolistic and single strategy to a multi-cooperation and comprehensive one. However, this strategic objective requires phased and sub-regional measures to achieve step by step.