Mixed Operation Of The "inherent Instability" Of Research

The universal banking system is a major subject to today's circles of financial theory and industry. The author tries to prove that the universal banking system is the inevitable tendency by the dialectic analysis to a theoretical problem of the universal banking system---"internal instability". The author reviews the evolutionary process of the banking industry's operation system and analyzes the "internal instability" of the universal banking system comprehensively and dialectically. This thesis consists of three chapters. Chapter 1, History and review on universal banking system. The author reviews the history of foreign banking industry and Chinese banking industry's universal banking systems. Different countries have different patterns of universal banking system. The author carries out division of banking operation system. This chapter is the basic part of the thesis. Chapter 2, The "internal instability" of the universal banking system. This part is the core of this thesis. In the first place, the author expounds what is the "internal instability" of the universal banking system? The author reviews the history and the origin of the problem and point out the internal instability of the universal banking system include three aspects. Some scholars considered the universal banking system violate the Commercial-loan Theory. They stated commercial banks should grant only short-term, productive, and self-liquidating-loans. Short-term loan were considered appropriate because the majority of banks' liabilities are short-term and because the due dates of the loans could be staggered so that there would be a steady inflow of funds to meet deposit withdrawals. Others think the risk of securities business is larger than that of banking industry so the universal banking system willenlarge the risk of banking industry. Because of the special position of commercial banks, the universal banking system is likely to quicken the transmission of the risk and expand the range of the risk. "Conflicts of Interest" is the most famous theory that criticizes the universal banking system. The theory considers there is the dissymmetry of information between banks and investor. The dissymmetry of information will lead to conflicts of interest. The banks have more inside information than investors. On the condition of the universal banking system banks have strong motivation to gain high proceeds by disguising the enterprises' operation information. The dissymmetry of information is the premise of conflicts of interest. On the condition of the universal banking system the proceeds and risk of commercial banks is also dissymmetric. Banks can gain all investment proceeds but don't assume all investment risk. The dissymmetry is the impetus of conflicts of interest. Then the author analyzes the change of internal instability in the current situation. The Commercial-loan Theory hasn't accorded with the development of economy. The theory has obvious limitation. This theory doesn't consider the variety of the loan and can't satisfy different need；This theory doesn't wake up to the relative stability of the deposit. The effective use of the deposit by the commercial banks not only will not affect the banks' fluidity but also will increase banks' proceeds； This theory doesn't wake up to the real condition of payment of the loan. It is not the term but the operational condition of the enterprises. Management theory of Commercial banks goes through three phases:Asset Management Theory, Liability Management Theory(50s-60s), Assets and liabilities Management Theory(70s). The Commercial-loan Theory is one of Asset Management Theory and the most economists don't accept this theory now. Will the universal banking system enlarge the risk of banking industry? Many economists study the problem by analyzing someinterrelated data. By these data they find there is no proof that can testify this viewpoint. In fact, the universal banking system is most likely to depress the risk of banking industry because this system can diversify as...