Self-actualizatial Financial Industry Dynamics And Its Implications On China Finance Reform

This thesis mainly focuses on explaining how the financial industry dynamics on it own. From an economic perspective, we analyze the dynamics of a deposit financial intermediation on a market-based economy. Then we add the institutional change, such as technique innovation, to the analytical framework.Our main findings are as follows:self-interest concern is the basic force of financial innovation and other activities that shaped the financial services industry. Due to the institutional environment change, the operational fundamental of deposit financial intermediation changes significantly. This changes the compete patten of financial industry, and result in different behaviors and economic effects. It is the fundamental institutional environment dynamics and self-interest concern, which changed the compete environment, that shape the landscapes of the financial industry. The market participants can always make the best choices under a given institutional environment, which contribute to a best economic welfare. The economic results of the dynamics are the decline of the cost of financial services and increased supply of value-added financial services.We also analyze the empirical evidences of the U.S. commercial banking industry from1934to2011and the recent financial industry dynamics in China. These evidences support our main findings.Some implications about China finance reform are made at the end of this paper, includes as follows:improvement of market economy infrastructure, such as legal system, truly market competitors; deepening the market reform in real economy; restraining the government’s power of public finance.