Research On The Impact Of Dual Market Competition On Bank Stability

Finance is the blood of the whole economy,financial activity is economic activity,financial stability is economic stability.Bank stability,as the core of financial stability,plays an important role in financial stability and economic security.However,with the deregulation of interest rate and the continuous development of capital market,the banking industry is not only facing more fierce competition among banks,but also facing the competition from the capital market,that is,the double market competition.Among the many factors that affect the stability of banks,economists have made an in-depth study on the relationship between inter-bank competition and bank stability,but have not reached the same point of view.The controversial point of view is: will the competition between banks worsen the stability of the banks or promote the development of the banks? Overall,the view is divided into "competitive fragility" hypotheses,"competitive stability" hypothesis.In the study of the competitive relationship between banks and capital markets,there are also differences between banks and capital markets on whether the relationship between banks and capital markets is "complementary" or "competitive".First of all,this paper systematically analyzes the stability of banks by consulting and drawing lessons from advanced literature at home and abroad.This paper combs the mechanism of "competition-fragility" and "competition-stability",and studies the influence mechanism of inter-bank competition,bank and capital market competition on bank stability respectively.Then,the panel data of 16 listed banks from 2007 to 2017 are selected for panel data analysis and test.It is found that:(1)China's inter-bank competition is negatively correlated with bank stability.When the level of inter-bank competition is lower,the lower the probability of bank bankruptcy,the more stable the banking system,whereas the higher the level of inter-bank competition,the more unstable the banking industry;(2)the competition between banks and capital markets in China is more unstable.Negative correlation with bank stability.The more fierce the competition between the capital market and the bank,the lower the stability of the bank;(3)for the unity of the bank,the stable macro-economic environment and the good management of the bank itself have significant positive correlation to the stability of the bank.Finally,according to the above theoretical analysis and empirical results,this paper studies the sound operation and management of banks from two aspects: how to promote effective competition among banks and strengthen the orderly competition between banks and capital markets.The purpose of this paper is to provide theoretical basis and policy conduct for the improvement of benign competition in China's financial market in the processof gradual financial reform.