Research On Banking Concentration And Banking Development

Finance is the core of modern economy,and banking is the most important part of the financial system.A large number of theoretical and empirical studies show that the change and development of banking structure and banking structure of a country largely affect the economic development of a country.After the 2008 global financial crisis,the collapse of the banking system had a huge impact on the global economy,forcing people to think more seriously about the problem of "too big to fail".But is it the best solution to divide the "big" banks into many "small" ones? How can the divided banking sector effectively fulfill its responsibility to maintain a country's financial stability and cope with the increasingly fierce international competition? Thus,it can be seen that how the banking structure affects the development(performance,inclusiveness and stability)of the banking industry is a problem worth studying.However,so far,few studies have systematically revealed the influence and inherent law of bank concentration and banking development from the perspective of the change of bank concentration.This paper attempts to take the global banking industry as the research sample,on this basis,make some efforts to explore a path that can not only improve the development of China's banking industry,but also improve the efficiency of financial services for the real economy,and promote the sustainable development of China's economy.This paper mainly uses the data of International monetary fund(IMF),World Bank(hereinafter referred to as "WB"),Transparency International and other databases,and adopts the research methods of theoretical analysis,comparative analysis and empirical analysis to study the issue of banking concentration and the development of banking industry.This paper is divided into seven chapters.The first chapter and the second chapter are introduction,theory and literature review respectively.The remaining core chapters are arranged as follows:The third chapter analyzes the change trend and development of banking concentration in the world and typical countries such as the United States,Britain,Germany,Japan,Brazil and China from 1996 to 2015.The following facts can be seen from the data:(i)The weighted average of global banking concentration shows an overall upward trend,which is mainly affected by the change of bank concentration in high income countries that have a greater impact on the global banking industry.(ii)With the economic development of a country,the change of bank concentration shows the following trend: low income countries due to historical reasons,the level of economic development is low,the impact of financial repression is greater,bank concentration is higher than other types of countries,but with the gradual deepening of economic development and finance,concentration shows a downward trend;The bank concentration in lower middle income countries shows a slow downward trend.Most of the upper middle income countries are in the stage of transformation and development,and the bank concentration fluctuates within a certain range.The bank concentration in high income countries is on a steady rise.(?)The banking industry in most countries and regions has its own hierarchical structure,and almost all of them show the characteristics that a few monopolistic large banks have a great impact on the development of the national banking industry.(?)The bank concentration degree problem can not only start from a country's financial system,may also need to consider the country's level of economic development,financial structure,political system,per capita income level,the degree of inflation,population density,and even the country's degree of corruption,degree of financial openness and the bank's own operating conditions and other factors.The fourth chapter discusses the impact of bank concentration on banking performance.By selecting the cross-country panel data of 130 countries and regions from 2006 to 2015 and building the panel model of fixed effect,the relationship between bank concentration and banking performance is analyzed,and the following conclusions are obtained:(i)There is a positive correlation between bank concentration and banking performance,and banking performance increases with the increase of bank concentration,which is in line with the research viewpoint of "Harvard school".(ii)When the level of economic development of a country is low,the demand for financial services is low.In this case,excessively low bank concentration may lead to excess supply of banking services,and is not conducive to the improvement of banking performance.(iii)From the perspective of national economic development,the excessively high performance of the banking sector may have a negative impact on economic growth,including causing the return of funds to the high-yielding banking sector,resulting in idle funds and increasing the borrowing costs of the non-bank sector,thus squeezing the space for the development of the real economy.Chapter five discusses the impact of bank concentration on banking inclusiveness.Similarly,the unbalanced cross-country panel data of 130 countries and regions from 2006 to 2015 were selected to construct the model of fixed effect,and conduct an empirical analysis on the relationship between bank concentration and inclusiveness.Main conclusions are obtained:(i)There is a negative correlation between bank concentration and inclusiveness,lowing bank concentration is conducive to improve the banking inclusion,which is consistent with the traditional research point of view.(ii)In countries and regions with higher levels of economic development,the government puts forward higher requirements for big Banks to promote inclusive social responsibility.In terms of the demand for financial services,when people have relatively single demand for banking services,the inclusiveness can be improved by improving bank concentration and combining with government support.When people's demand for banking services is relatively diversified,professional banking institutions can be appropriately added to improve the depth and quality of banking services and the inclusiveness of banking industry.(iii)Under the same bank concentration,a country's financial inclusion is related to this country's financial regulation,such that the Chinese Banking and Insurance Regulatory Commission has designed "no less than three" specific provisions for the inclusion(Inclusive Finance)of large state-controlled banks.So that the large banks' inclusion is greatly improved;In less developed countries where financial repression is severe,too much bank concentration makes inclusion much less inclusive.Chapter six discusses the impact of bank concentration on banking stability.This chapter selected the unbalanced panel data of 130 countries and regions from 2006 to 2015,and established the panel model of fixed effect for regression analysis.According to the regression results,it can be concluded that:(i)There is a negative correlation between bank concentration and banking stability,which conforms to the research viewpoint of "concentration-fragility".(ii)In middle income countries in economic transition,bank concentration is negatively correlated with stability.(iii)From the results of other heterogeneity analysis,it can be seen that the improvement of bank concentration can improve the stability of the banking industry under special conditions.The possible reasons include the protection measures taken by the government for large banking institutions and the improvement of the quality of financial supervision,which is one of the reasons why international regulators have paid special attention to "systemically important banks" in recent decades.In chapter seven,the important research conclusions of this paper are sorted out and the corresponding policy suggestions are put forward.This study believes that in the modern market economy environment,the structure of the banking industry plays an important role in the development of the banking industry,which is mainly affected by the performance,inclusiveness and stability of the banking industry.However,there is no optimal banking structure suitable for all economies.Each economy has an optimal banking structure that adapts to its own development and serves the development of the real economy at different stages of development.That is to say,The optimal concentration interval is different and dynamic in different countries and development stages.Based on the above conclusions,this paper puts forward policy Suggestions:(i)Actively promote bank holding groups and the development of multilevel financial market.(ii)Encourage large banks to enhance market competitiveness to improve banking performance.(iii)To promote the inclusion of banking industry through government guidance and regulation and big Banks to promote inclusive social responsibility.(iv)Improve the quality of supervision,optimize the structure of the banking industry to maintain the stability of the banking industry.(v)Correctly handle the relationship among banking performance,inclusion and stability.