The Relationship Between Banking Structure And Macroeconomic Fluctuation

Since the reform and opening up, China’s economic develop rapidly, Chinese financial system reform especially the banking structure changed significantly, as state-owned banks proportion gradually decreased, the proportion of small and medium-sized banks increased steadily. At the same time, economic fluctuations features high and smooth. Based on the above facts, the article studies on the China structural changes in banking and macroeconomic fluctuations in a possible link.Based on the summarizes of the banking structure in macro economic fluctuation theory, the systematical experience of domestic and foreign literature, this paper firstly analyzes the basic situation of banking structure change and macroeconomic fluctuations in China since the reform and opening up, then based on the provincial panel data of banking market structure and macroeconomic fluctuations provide empirical evidence. The empirical research shows that the fixed effect model based on small and medium banks increased the proportion of damping effect on monetary shock is significant; it was a U type between the intermediary bank development and economic cycle fluctuation. In view of the economic cycle hold of the stick, this paper uses the dynamic panel GMM model (GMM) for robustness testing, found empirical conclusion is robust.At present, China is in the economic transition period of important strategic opportunities, the structural adjustment and maintain steady economic development, avoid the economic ups and downs combine is an important task of the policy of the authorities. Therefore, it is of great practical significance to understand the impact of changes in banking structure on economic fluctuations. This paper shows that it is of great practical value to improve the structure of the banking industry by upgrading the development space of small and medium banks, and to achieve the important policy objectives of economic growth.