A Study On Impact Of Financial Disintermediation On Commercial Bank Of China

In recent years, with the financial market of China constantly developing as well as the reforming of finance going on gradually, the trend has come out that the appearance of capital converts gradually from indirect financing market to directing market due to the improving directing financing ratio and the increasing autonomous right given more space by supervision department, which is called "Financial Disintermediation", which means the surplus side and deficit side of funds bypass the financial intermediaries directly to trade in financial market. That phenomenon appeared in the 1960s of the US firstly, and Hester analyzed the content and the reason of US financial disintermediation phenomenon primarily.Since then, financial disintermediation also has revealed in other countries gradually, which is related to the changes in the structure of financial markets and deregulation, which attracts the attention of researchers including a great many of scholars from different countries, even in emerging countries who focused and studied on the financial disintermediation combining with their own national conditions all over the world. Throughout the overseas financial disintermediation phenomenon, it can be found that, the emergence of this economic phenomenon mostly links with the transition of the financial markets structure, and the relaxation of the financial regulation. However, what the scholars, at home and abroad, research the study of financial disintermediation’s effect on commercial banks, mainly focused on the explanation of the phenomenon itself and some qualitative analysis, including the concept of financial disintermediation, the basic cause and the effect of it. Besides a small part of empirical research in the field of direct financing, few studies by using the method of empirical analysis explain the impact of financial disintermediation working on commercial banks. Therefore, to deal with the increasingly tendency of financial disintermediation, business circles and theoretical circles needs a further research and evaluation of the influence level of the commercial banks in this circumstance, and optimize the system model according to the relevant results.The phenomenon of financial disintermediation has appeared relatively lately in China. Bank, as the principal part of the financial industry in China, links to the economic security and social stability, which is one of the national key supports and monitoring areas. But with the deepening reform of economic system transition, the unprecedented and unexpected challenges will be faced by commercial banks. They can’t keep on the traditional business model, and thus expanding the intermediate business incomes and strengthening the new platform of becomes the core task of commercial banks.Based on the claims above, this article depends on the understanding and the analyzing of the literature reviews, with both the quantitative analyze and qualitative analyze, tries to verify the theoretical analysis. With the systematic analysis, the data will show the specific effect of commercial banks under the background of financial disintermediation, and the future of financial market optimization, the innovation path selection of commercial bank. With the analysis in this paper, the empirical research and statistical analysis are used to evident and fix the theoretical hypothesis. This paper respectively uses increment on deposit and loan as indicator to measure the changes in deposits and loans of commercial bank. Then, it uses the scale of direct financing as an indicator of the degree of financial disintermediation to measure of the ability to fiance" in direct financing market. The article builds three models to explain the effect of commercial banks under financial disintermediation:the vector auto-regression (VAR) and Granger causality test show the interaction relationship between variables; impulse response function (IRF) to analyze the incidence of dependent variable affected by index. Sample data are quarterly data, which collect from the "wind database" between the year 2003 to 2015, including 49 sample data to build four indicators:deposit increasing amount, loan increasing amount, the stock assets, and the bond assets.The results of empirical indicate that, on the one hand, although the savings rate of our country residents remained high in the world scope, especially the savings account for large proportion of the commercial bank deposit. But with the deepening of financial disintermediation, radical changes have also taken place in the residents’ asset structure. Many financial products and financial instruments provide more value-added choices. On the other hand, financial disintermediation reduces the loan, which constitutes the main assets of commercial bank. The enterprises, rely on bank loans for financing before, have diversified financing options, which split-flow the bank loans. In addition, the phenomenon of financial disintermediation will exist for a long time in the circumstance of financial development.This paper consists of six sections. The first chapter-introduction, introduces the aim to explain the research background, significance, the excuse to select this topic,the foundation of the argument, and the innovation and inadequate of this reach. It claims the reason to study on the phenomenon of financial disintermediation from the perspective of the concept and definition. The second chapter-literature review. It is based on the existing literature, through the description of financial disintermediation to define the research area firstly, then claims and concludes the reason and main expression of financial disintermediation, and finally shows the measurement ways of financial disintermediation for choose the suitable model in part of qualitative analysis. The third chapter based on the present situation of economic development, analyzes the trend of financial disintermediation on commercial bank on both traditional business and innovation business areas. It points out the challenges of the deposits and leans decrease trend and core functions of optimization and innovation of that commercial banks in this context. The fourth chapter is to establish index, select the data sample and build the model, by the eviews software to apply the vector auto-regression (VAR), granger causality test and impulse response function(IRF) to analyze the financial effect. The fifth part is based on analysis of quantitative and qualitative analysis, which analyzes the innovation path of commercial Banks. Finally, come up with the suggestions of commercial bank transformation under the background of financial disintermediation. To sum up, every corn has two sides, such as the phenomenon of financial disintermediation. The commercial banks in our country should transfer the challenges to opportunities, improve the speed of both the reformation and innovation for grasp and create the core advantages come by the financial disintermediation, and to reach the financial market development.