The Financial Innovations And The Business Development Of Commercial Banks

Contemporary financial innovations began in the late 1950s. It is a revolution for financial instruments and financial transaction modes, and meanwhile provides an opportunity for the birth of new financial markets, the appearance of new financial organizations and the foundation of new financial systems. It can be divided into four stages: the first stage is the financial innovations emerging in the 1960s, whose aim was to escape the financial control; the second one is the financial innovations appearing in the 1970s, whose object was to transfer risks; the third one is the financial innovations coming forth in the 1980s, which reached the peak, and during this stage, the four inventions in the financial domain were given to birth, including the note issuance facilities (NIFs), the swap, the options and the forward rate agreements (FRAs), it is obviously that in this period the innovations were multidimensional; the forth one is the financial innovations from the 1990s to now, in the period the world economy shows regionalization and collectivization, and the financial markets appear globalization, furthermore, the scale and the extent of financial innovations are enlarged.With the advancement of financial innovation, the theory of financial innovation is developing continuously. The innovation theory of Schumpeter founded the base for the development of financial innovation theory. After that, in the view of the interior and exterior restrictions of financial organizations, W·L·Silber pointed out that the financial innovations were acts in self-defense that were operated by micro-financial organizations to reach the profit maximum and to lighten the financial restrictions. Based on this point, he proposed the restriction abduction theory. But the scholars of institutional school considered the financial innovations were a kind of institutional reforms, there was influence between the financial innovations and economic...