Research On The Influence Of Financial Disintermediation On The Profitability Of China's Commercial Banks And Countering Policies

Since China joined the world economic and trade organization,China's market economy has developed rapidly and the financial system has been continuously improved.The scale of direct financing is expanding,and the variety of investment tools is diverse.The financial disintermediation phenomenon that financing demand is not through commercial banks appears and becomes more and more significant.Financial disintermediation has reduced the quality of commercial banks' customers and hit the traditional business of commercial banks.It also changes the profit model and development direction of commercial banks,and increases the risk of commercial Banks.This paper aims to study the impact of financial disintermediation on commercial Banks' profitability and find the countering policies for reducing the negative influence and promoting the stable development of China's financial industry.Firstly,the relevant theories are summarized and the financial disintermediation in this paper is defined from narrow sense that the intermediation refers to commercial banks.It analyzes the mechanism of financial disintermediation on commercial Banks' profitability from a micro perspective.Secondly,the paper is based on the current situation of financial disintermediation in China,from financial policies and regulations,multi-level capital market,interest rate marketization,the rapid development of Internet financial and third-party payment,residents' financial management concepts and so on,analysis the reason and summarizes its impact on China's commercial banks.Then,the paper conducts an empirical analysis based on the data of relevant variables of 16 listed commercial Banks in China from 2005 to 2016 by individual fixed effect model.The results show that:(1)financial disintermediation has a negative impact on commercial banks' profitability.(2)different types of commercial banks has different degrees of influence by financial disintermediation.Overall financial disintermediation is effect can't offset commercial bank assets,the financial disintermediation all the negative effect brought by the profitability,and financial disintermediation is effect not only resolve the bank liabilities disintermediation impact of commercial bank profitability,also to some extent,improved the profitability of the bank.Finally,with respect to how to improve the problems in financial disintermediation,the paper uses empirical research results to provide corresponding policy recommendations from our country commercial bank management,development,business and product perspective.commercial banks can strengthen the risk management,improve the level of asset management;expand the profit source and promote the international layout,adjust business structure and develop supply chain finance,focus on financial innovation,strengthen the countermeasure and suggestion of product competitiveness,for reference by relevant subject.