Banking Internationalization Process And The Effect

Referring to the banks' internationalization, this article makes a systematic exploration about the reason, process and effect of the banking internationalization both in developed states and in developing countries. Then, we forecast the course of China's banking internationalization under the background of China's joining the WTO.Firstly, according to the feature of the banks that involve in the internationalization, we focus on the utility of country and build a synthetic analysis framework by usage of new Institutional Economics and Cost-Benefit approach. Based on the framework, we research the banking internationalization in details and summarize the convergence and divergence in global horizon. This work points that internal institution structure acts as the dominant explanation factor, as well as the external environment and its transition. So, the feature and process of banking internationalization are different between countries, even between different periods in one state. Although the evolution would influence the efficiency and stability of banking, empirical proof shows that the original banking structure and macro-economical situations confines the effect of banking internationalization.In the tide of global banking M&A, the global banks get more and more important role and influence in the world. In two ways will the global banks restrict the progress of banking internationalization: the range of the selections to be internationalized and the ability of banking control. More than two decade before, banking internationalization appeared in China. The experience shows that China's banking internationalization is accompanying with the transition of the development strategy. In the evolution, foreign banks impacted some fields. After joining WTO, although the environment changes a lot, the internationalization course will step up stably in the near future without radical growth of the market share of foreign banks. Not only the stable macro-economical circumstance is continuously needed, but also the essential reform progress of the four state-owned banks is needed.