Bank "Disintermediation" Studies On Theinfluence Of The Commercial Bank Deposit And Lending Business

The history of “Financial disintermediation” is only a short period of ten years, but it is nearly six decades in the European and American countries. Large scale of “financial disintermediation” began in 1950, mainly due to the commercial banks interest rate was subject to strict regulation and supervision of financial risks, and the regulatory funds and investment market is more relaxed, and thus a higher interest rate, while the bond market and the paper market is also developing rapidly, making residents and businesses choose to buy bond funds or find other ways to invest resulting in shrinking business of commercial banks. Then began the European and American commercial banks “financial anti disintermediation” process, the development of commercial banks in Europe and America can be accompanied by “financial disintermediation”. China’s financial markets than in the western capitalist countries is concerned, is lagging behind, “financial disintermediation” began to develop in China started in the 1990 s, which is similar to the case of the America and European situations. The interest rates of commercial banks were under strict supervision which led to higher financing costs, in the mean time, direct financing markets such as the stock market, bond market and futures market were developing rapidly due to lax regulation, accelerating China’s “financial disintermediation” of the process.Commercial banks as a core component in the financial system have four main financial functions, namely, the credit intermediary, the payment intermediary, credit creation and financial services. The main functions of credit intermediation involve bank deposits and loans, commercial banks use their own credit to attract customers’ deposits, and then use these deposits as the original funds to issue loans. The first impact of “financial disintermediation” of commercial banks is “off” to the bank’s credit intermediation functions, depositors seek higher yields of managing money; lenders are no longer dependent on bank but to invest in direct financing market. Secondly, the “financial disintermediation” generates Internet banking, including third-party payment platform that can help users to pay, transfers, remittances and other traditional commercial banking business, thus weakening the role of the bank’s payment intermediation. Again, when depositors funds in the bank, banks use these deposits in order to lend out as an original loan, then recover the loan as the new formation of deposits, this process is the formation of a reciprocating derived bank deposits, making the original deposit continues to expand, making the bank’s credit create value. But this process will affect commercial banks’ credit function as well as reducing the banks’ deposits and loans. The final step of “Financial disintermediation” is “off” to the financial services functions of commercial banks, with the “disintermediation” deepening, a large high-quality companies gradually set up their own finance companies, the entire group of funds managed by financial companies, instead of reaching financial services through commercial banks, and thus the function of financial services of commercial banks will also be affected.This article focuses on the impact of commercial bank credit intermediation functions arising from China’s “financial disintermediation”, especially the impact of its deposit and lending structure to the cause, and thus the concept of the article will be bank “disintermediation”, the narrowing definition of “financial disintermediation” which means both supply and demand parties make transactions outside the bank system. In this paper, the theory of commercial bank deposits and loans are explained first, summarizing the advantages and disadvantages of two theories, followed by bank “disintermediation” definition. By simple definition of the bank “disintermediation” can help readers understand the commercial banks in the supply of funds between the roles played by both sides. Then, reasons bank “disintermediation” produced in the country were discussed, this part mainly analyzes the capital markets, financial regulation and financial information on the development of three factors. Subsequently leads to the central part of the paper that the bank “disintermediation” resulting impact on China’s commercial banks’ deposit and loan structure, elaborated from both loans and deposits. Loans are mainly from personal loans, large conglomerates loans and small business loans. By analyzing these three approaches leading to the results that commercial banks’ business is primarily split by P2 P network, capital markets and new stock market, making commercial banks lending profits. Deposits are analyzed into residents’ deposits and corporate deposits concluding that the bank “disintermediation” affects the residents in the way of savings, the funds will be deposited directly into market instead of bank deposits. Corporate businesses affected by the bank “disintermediation” have also changed the way of financial management. Through the bank “disintermediation” impact on deposit and loan business analysis, combined with today’s article followed by Internet banking and big data and other hot spots, put forward corresponding countermeasures, such as the development of the retail business, the development of intermediary business, increase commercial banks’ net efforts and the development of small and micro financing.Commercial banks’ four functions perfectly affect China’s economic development, with the emergence of a variety of new financial instruments, the position of commercial banks’ traditional hegemony has been shaken, and commercial banks need to actively deal with “financial disintermediation”. Therefore, studying the impact of deposits and loans of commercial banks has great significance in terms of the operation of commercial banks.