Research On The Measurement Of Global Banking Integration

In the global economic and financial integration, the region has been committed to the promotion and development of financial integration. Financial integration can be divided into bank market integration, stock market integration and bond market integration. EU, East Asia and the BRICS countries have taken different ways to promote the development of the integration of the banking market. The consolidation of the European Union currency, the establishment of the European Central Bank; East Asia currency swap, Asian Bond Fund and the regional reserve pool; BRICS National Development Bank and local currency settlement business have contributed to the development of the regional banking market integration. Bank market integration can not only promote the development of integration of other financial markets, improve the efficiency of the financial market, guide funds flow rationally, promote the development of the domestic economy, at the same time, it can also promote the regional prosperity and development, and regional financial system can be more solid and economic loss can be smaller in the face of external financial shocks. Therefore, the study of banking market integration has important practical significance.Through building binary diagonal VAR-VECH-GARCH model using the overnight lending rate of countries to measure the European Union, East Asia, the BRICS and global bank market integration, based on the price index method, and make horizontal comparison for four areas’ banking market integration degree; carry on the longitudinal comparison to the bank, stock, bond and commodity market integration of same area, analyzes the reasons of the differences and put forward policy recommendations. Through the model, it is concluded that the two countries variable conditional correlation coefficient time series, and average the sequence to get the mean correlation coefficient of two country’s overall condition, and then through the correlation coefficients of pairwise countries being averaged to get regional correlation coefficient level, and the data representing the regional banking market integration degree. This paper argues that if the overnight lending rate of the bank market between the two countries is positive, namely conditional correlation coefficient is positive, then the banks of two countries are in integration, and the positive correlation is greater, the degree of integration is higher.The results of empirical analysis are as follows: at present, the European Union has realized the integration of banking market, the East Asian region, the BRICS and the global banking market have not realized integration. Combined with the results of previous studies, compare the banking market, stock market, bond market and commodity market integration vertically, it is concluded that the EU countries banking market, bond market, stock market, commodity market has realized the integration; East Asia bank market, stock market, bond market did not achieve the integration and commodity market has realized high degree of integration; BRICS bank market, stock market, bond market did not achieve integration, commodity market realized to a certain degree of integration; global banking market fails to reach the integration, stock, bond and commodity markets are to achieve the integration.The reasons for the difference of the degree of integration of the banking markets in the four areas are mainly due to economic factors, institutional factors, geographical factors, political factors and infrastructure factors. To analysis the reasons of regional banking market, stock market, bond market and commodity market integration differences, we know that restricting factors of financial market integration mainly are the high proportion of indirect financing of domestic financing, capital account control, the slow monetary cooperation process. Promoting factors of the commodity market integration is mainly in the region economic complementarity and the establishment of free trade area etc..Finally, we put forward some suggestions for regional policy in East Asia and the BRICS bank market integration construction and proposed policy recommendations to China, including measures to accelerate the financial market structure adjustment and the marketization of interest rate, the gradual liberalization of the capital account control, accelerate the process of internationalization of the RMB.