The Effects Of The Internationalization Of RMB On Chinese Banking Industry

Under the accelerating trend of global financial integration, and with the strength of the Chinese economy and politics, the trend of RMB internationalization appears step by step. RMB is in the primary phase of regional currency at present, but not international currency yet. While the tendency of RMB internationalization has been established, and the quantitative change is going forward to the qualitative change. Nowadays financial services are computerized, and the circulation of currency is mostly supported by the banking system. The RMB internationalization will make the operation and risk condition of the banks change, which simultaneously brings about opportunities and challenges. And this requests each bank to seek new methods of management.By using the theoretical analysis, international experience comparing and empirical study, this paper starts from describing the present situation of the internationalization of RMB. Then under the theory of Currency Substitution, the theory of Financial Deepening and the theory of Optimum Currency Areas, the effects of the internationalization of RMB on Chinese banking industry are analysed, using the historical experience or lessons of the internationalization of Dollar, Yen and Euro for reference. And then the paper analyses the realistic effects of the RMB internationalization on banks under the logic framework of the three principles of the banking management, and puts forward policy proposals of the banking development.The paper is divided into 5 chapters:In chapter 1, the introduction of this paper, it gives the background and importance of the article, present research home and abroad, the structure of the article, the research methods, and etc.In chapter 2, it puts up a theoretical model of measuring the level of the internationalization of RMB, and analyses the present situation of it.In chapter 3, it analyses the effects of the internationalization of RMB on Chinese banking industry from the framework of theories, using the historical experience or lessons of the dominating international currencies for reference.In chapter 4, it discusses how the RMB internationalization affects the banks'business, profits, risk situation and so on, with the framework of the three principles of banks-safety, liquidity and profitability.In Chapter 5, the policy proposals of how the Chinese banking develops under the trend of the RMB internationalization are advanced.