Effects Of Direct Financing Of Enterprises On The Business Of Commercial Banks In China

To support rapid development of economy, capital markets of many country continue to improve. The sustainable development of direct financing market resulting in "financial disintermediation". "Financial disintermediation" refers to the money demands and money supplies trad with each other directly bypassing financial intermediaries. It is first appeared in the late last century in American, Symbolized by the promulgation of the "Q rule" of the USA government. The ordinance makes America savings flow out from the commercial bank system to get higher returns. Commercial bank assets get shrink, lower profitability and the operating difficulties. Then the main economic power in the world appears that direct financing "squeeze" the living space of loan financing, and more. The beginning of "financial disintermediation" mostly because the promulgating of relevant policy, which is similar in these countries.In China, the proportion of the non interest income of commercial banks in the total income is still low, but is facing enormous pressure brought by the rapid development of direct financing. This paper selected related samples from the people’s Bank of Chinese network and Chinese bond information network, used vector auto regression model, impulse response function and empirical tools to analysis the impact of the scale of direct financing on the assets of commercial banks. The results show that, both in the equity market and bond market, the current one standard deviation shock makes compression to loan of commercial banks. But in the long term, the development of direct financing will stimulate business of commercial banks. They will promote the improvement of the capital market together, and promote economic prosperity.