Bank Off-balance Sheet Activities Innovation Subject To Institutional Constraints

Bank off-balance sheet activities (OBSA) innovation is a dynamic evolution process, which has its own immanent mechanism. This paper choose neo-institutional economics as tool for analysis, focused discussion on the institutional constraints for OBSA innovation, and aimed to present a deep insight into the institutional factors which cumber bank OBSA innovation in China and the evolving path of the same.Firstly, this paper made a brief review on financial innovation theories in China and abroad, and evaluated the innovation of bank OBSA in China using quantitative methods. Based on the conclusion reached regarding OBSA innovation in China, this paper analyzed the typical institutional constraints for OBSA innovation using the institutional change theory, pointed out the"Path Dependent Character"of OBSA innovation and explained the phenomenon from state-owned bank property right durance, asset specificity, interest groups resist, financial restraint rents and bureaucratic organizations, etc. After that, this paper analyzed the self-organizing evolution and diffusion mechanism of OBSA innovation respectively using related theories. Finally, as a case study, this paper examined the contractual structure of bank loan sales and securitization, and gave an explanation to the dissimilation of loan sales in China from institutional aspect.Major contributions of this paper are as follows: Firstly, by introducing neo-institutional economics theories into the analysis of OBSA innovation, this paper made a breakthrough in research methods, and broadened our view for research in the field. Secondly, this paper studied the evolution and diffusion mechanism of OBSA innovation creatively from the aspects of self-organizing and diffusion theories, which enabled us to make a deeper insight into innovation of OBSA and furthered our understanding of the same. Meanwhile, this paper drawed a basic conclusion that efficiency of a financial innovation depends largely on adaptiveness of the innovation to the specific institutional constraints.