| While Chinese security market has not been developing for a long time, commercial bank took up the centre of the financial system. This phenomena, not only made the fund use-efficiency lower, but also made the banking system accumulate large risks, which played a passive role on the stability of the whole financial system. Recently, with the fast development of stock market, local bank starts to face the challenge from direct financing. Now, the"Pilot approach of corporate bond"is launched by CSRC in August 14th 2007, which indicates the banking environment is undergoing fundamental changes, and direct financing will gradually become the main body of China's financing system. Therefore, this research on the opportunities and challenges brought from corporate bonds market to the banking sector, is meaningful to determine the way and direction of banking reform.Because of the interactive relationship between direct and indirect financing, there is substitution effect existing between loan and bond. Through the research from foreign developed country and emerging markets, we can note that corporate bond has occupied dominant position in the modern financing system without exception. Moreover, it is interesting to find that the developing history of corporate bond equals to the trace of banking reform. Judging from our economic situation, the strong demand in the financing of enterprises and the financial system liquidity surplus, the launching of corporate bond is certain to meet a bright future. It is an uncommon opportunity for banks to participate in the corporate bond market, not only reducing the risk of the banking system, but also promoting business innovation. However, in the short term, with the booming of direct financing, bank would lose the leading role and their income margin from credit business decreases. When it is difficult to survive by relying on the traditional business structure, the"financial disintermediation"deepens. It is long time that the bank has been required to reform, but banking sector still lacks the driving force to do this because of the system dominated by indirect financing. Today, in response to the challenge from corporate bond developing, commercial banks are required to innovate from the financial functions and business structure in line with modern requirements of the operating system: through innovating operational method, creating comprehensive management, and improve risk control system, banks finish the functional changing from a"credit intermediary"to"comprehensive service institution"; through adjusting business structure, promoting diverse clients, and developing asset securitization, banks finish the strategy changing from"making spreads"to"making management". Therefore,"financial disintermediation"will urge the banks to develop innovation. Only by relying on the modern comprehensive management, and innovation on business and strategy, commercial banks can face the impact brought by the development of corporate bond market, seizing the opportunities and dealing with the challenges. |
