The Research Of The Effect Of Diversification On Performance And Risk Of Commercial Banks

For a long time,the business model and profit structure of China's commercial banks have been dominated by interest spreads,the business structure is relatively single,and the degree of diversification has been insufficient.However,with the process of interest rate liberalization accelerating,the continuous deepening of financial reforms,the increasingly strengthened supervision of the industry,and the constant emergence of other competing entities,the traditional commercial banks' extremely profitable mode of relying heavily on deposit and loan spreads has been greatly challenged,great changes have taken place.The accelerating interest rate marketization,industry regulation,constantly strengthened,the phenomenon of "financial disintermediation" rising,the traditional commercial Banks extremely dependent on the profit pattern of spreads under great challenge.In the face of the changes in the industry,the regulatory policies and the changing and the development of the business,our business Banks have driven their businesses to diversify their business to diversify into the new revenue streams through business innovation,integration of resources,mergers and acquisitions.Then,whether the diversification of commercial Banks is conducive to the improvement of operating performance,whether it is conducive to the reduction of operational risk,and the development strategies that commercial Banks need to develop to promote performance improvement and risk reduction? In addition,due to the differences in the business development of domestic commercial Banks due to the differences in system and scale,are there differences in the results of diversified operation of different types of Banks? These are urgent problems to be solved.In order to better answer the above questions,this paper firstly sorted out the domestic and foreign related researches on the diversification of commercial Banks,then introduced the relevant theories of diversified operation on the basis of concept definition,and then elaborated on the definition,development path,realization form and development status of commercial Banks' diversified operation.Then,this paper analyzed the impact of diversified operation of commercial Banks from different types of commercial Banks,and analyzed the impact of diversified operation of commercial Banks on their operating performance and operational risk from multiple perspectives.Then,this paper adopts the panel data model,and uses the entropy method to measure the diversification of commercial Banks.The domestic listed commercial Banks are divided into large state-owned Banks and small and medium-sized commercial Banks.The results show that diversified operation can increase the performance of large state-owned Banks and small and medium-sized commercial Banks,and the effect is more obvious to large state-owned Banks.From the perspective of risk,diversification can disperse the operation risk of large state-owned Banks,but it will increase the operational risk of small and medium-sized commercial Banks.At last,this paper puts forward corresponding policy Suggestions based on current situation analysis,theoretical research and empirical test results.That is to say,commercial banks should promote business innovation,strengthen risk control,and cultivate core competitiveness.Regulators should optimize their supervision methods,improve the supervision system,and jointly promote the steady and effective development of diversified operations of many commercial banks.