Research On The Impact Of P2P Development On The Liquidity Creation Of Commercial Banks

With the development and popularization of Internet Technology,Internet Finance occupies an important position in China Financial Markets.The P2P(Peer to Peer)lending industry 5 which is very typical among Internet Finance,has a great impact on the assets and liabilities business on commercial banks because that the advantages of simple operation and low transaction costs,which affects the liquidity creation ability of commercial banks.The current literature mainly focuses on the impact of the P2P lending model on commercial Banks,but the study about the effect of the development of the P2P lending industry on the liquidity creation ability of commercial banks is rare.This paper introduces the transaction cost theory,Financial disintermediation theory and the current situation of combining the development of the P2P lending industry.I get the conclusion that the development of the P2P lending industry has a certain influence on the commercial banks1 liquidity creation,and the effect varies from bank to bank.Based on the above theoretical analysis that three hypotheses are given.Then,according to 88 domestic banks' panel data,commercial banks' liquidity creation volume is the explained variables.P2P lending volumes,logarithmic scale of assets,the money supply growth,the GDP growth,the average return on assets,the return on equity and the capital adequacy ratio of explanatory variables is the empirical model.The result shows that the total volume of the P2P transactions is negatively correlated with the liquidity creation of national shareholding commercial banks and city commercial banks,and greater impact on the national shareholding commercial banks as well as impacting on state-owned commercial banks is positively correlated and not significant.Finally,based on the result from the theoretical analysis and the empirical research above,this paper puts forward some suggestions to guarantee the healthy development of the P2P lending industry and cope with the threat and speed up the transformation within commercial banks.For example,the regulation of the P2P lending industry,commercial banks strengthen the development of the long tail market and the awareness of risk management,optimize the scale and structure of lending,value creation of customers,and adhere to the concept of innovation.In addition,commercial Banks should take the initiative to cooperate with Internet financial enterprises to draw on each others strengths and achieve mutual benefits.