The Impact Of Digital Inclusive Finance On The Liquidity Creation Of Commercial Banks

Commercial banks are important financial intermediaries in the financial market.The financial intermediary theory believes that liquidity creation is one of the important functions of commercial banks.Commercial banks use highly liquid liabilities to finance illiquid assets through maturity mismatch,thereby providing liquidity to the market.Therefore,it is very important to study the influencing factors of the liquidity creation of commercial banks for the operation and management of commercial banks and the stable development of the financial market.The rise of digital inclusive finance has had a huge impact on the business model and monopoly position of commercial banks,bringing both opportunities and challenges to the development of commercial banks.Existing research on the impact of digital financial inclusion on the banking industry mainly focuses on bank innovation,operational efficiency,and operational management,with little attention paid to the relationship between digital financial inclusion and bank liquidity creation.Specifically,digital financial inclusion will affect the liability structure and risk-taking level of commercial banks,and changes in the bank’s liability structure and risk-taking level will affect the liquidity creation of commercial banks.Therefore,digital financial inclusion will inevitably affect commercial banks.Bank liquidity creation.In terms of theoretical research,this paper analyzes the transmission mechanism of digital financial inclusion affecting bank liquidity creation under the intermediary effect of bank liability structure and risk-taking.Digital inclusive finance will affect the structure of bank liabilities.Digital inclusive finance has an impact on the traditional debt business of banks through the market crowding out effect,leading to the loss of bank deposit resources and inhibiting the creation of bank liquidity.Digital financial inclusion will also affect the risk-taking level of banks.The crowding out of traditional banking business by digital financial inclusion forces commercial banks to actively increase risk appetite and take higher risk levels to maintain profitability.However,increased risk will lead to difficulties in bank capital turnover,banks will increase credit requirements and reduce capital investment,and banks will reduce liquidity creation.In terms of empirical research,this paper uses the Digital Financial Inclusion Development Index released by Peking University to measure the development level of digital financial inclusion.The liquidity creation level of 60 commercial banks from 2016 to 2020 is measured through the B-B measurement method,and then a static panel regression model is constructed to test the impact of digital financial inclusion on the overall liquidity creation of banks.Then,it examines the intermediary role of bank risk-taking and liability structure in the impact of digital financial inclusion on bank liquidity creation.Finally,the robustness and heterogeneity discussions are examined.The empirical results of this paper show that digital financial inclusion inhibits bank liquidity creation and can be transmitted through the intermediary effect channels of liability structure and risk-taking.On the one hand,the development of digital financial inclusion crowds out the traditional liability business of banks,resulting in a decline in bank liquidity creation.On the other hand,digital financial inclusion forces banks to increase their risk appetite,thereby inhibiting the creation of bank liquidity.Through heterogeneity analysis,it is found that digital financial inclusion has a more significant impact on banks with high risk taking.Finally,it summarizes the results of the previous theoretical research and empirical analysis,and puts forward relevant policy suggestions on this basis.