Analysis Of The Banking Monopoly And Its Influence

Nowadays,the growth rate of economy is becoming slower,the real economy’s problems have become diversified.Different with the economic environment,the growth rate of the banking industry reached 14.4% and the net asset return reached18.97%,which is not reasonable."What is the factor that leads the banking industry to maintain such a high growth rate in the poor economy?","Whether there is monopoly in the banking sector?","What will be the impact of the high yield of the banking sector?" and other pertinent questions has been a hot topic in the academic community.Firstly,the paper analyzes the banking sector’s high growth rate.Then,with the help of Industrial Organization Theory,the dissertation measure the market structure of the banking industry to prove the existence of banking monopoly.This dissertation also use Klette estimation method to analyse the reasons for the formation of the banking monopoly.On the basis of preceding study,this paper studies the influence of banking monopoly from inside and outside of the banking industry.Within the industry,the banking monopoly caused different business strategy;Outside the industry,the banking monopoly make banking be more powerful in the economic activity,which caused the loss of social welfare.In the end,the paper put forward some proposals in the analysis foundation.The study found that the market structure of Chinese banking industry is low stage oligopoly.The reason caused this is government’s administrative protection.Because of the monopoly,the banking industry is divided into two groups,the banking industry has occupied a great deal of social welfare.In a word banking monopoly is not a good factor for banking and economy.